When a loved one dies, the grieving process is draining. However, those left behind usually need to manage the asset division of the deceased. When your family member only leaves a will behind, you may need to go through a probate process.
An executor or personal representative named in the will may list a real estate property for sale. The probate court can also name an executor if the will doesn’t name anyone.
Are you considering selling a house in probate? With the court’s assistance, you can manage the distribution of probate real estate and other assets. The entire probate sale is rather complex. You need to follow the requirements below to ensure a legal real estate transaction.
If you have inherited property, keep reading to learn the legal process for selling a house in probate.
The Definition of a House in Probate
Before we delve too far into the probate process and division of assets of a deceased person, it’s vital to define a probate home sale. Probate occurs when a deceased family member leaves various assets including bank accounts, financial statements, investments, and real estate for distribution among loved ones.
Probate involves managing a deceased person’s will or the property of someone who has died without a will. Along with giving assets to beneficiaries, it may include using the assets to pay off any liabilities on real estate.
The probate process for real estate transactions involves either a formal or informal method.
When done formally, the court must approve every part of the real estate sale process. Therefore, this method takes much longer than the informal one. A formal process takes six months or longer in many cases. It also requires the executor to hire a probate attorney.
Are you the estate executor? You will need to get an appraisal done on the house to determine its appraised value. The appraisal has specific requirements you need to follow before putting your home on the real estate market. The executor of the estate will need to use the appraised value when setting the asking price for the home sale.
To allow the sale of the probate property, the executor will have to petition the court. After the court hearing, you should have the formal approval to begin the home sale. The probate court requires that the property sale reaches at least 90 percent of the appraised amount.
You should list the house as a probate sale. Once a buyer makes an offer on the house, you will need to hold another court hearing. Before that happens, you will need to advertise the home sale with the asking price in a local newspaper. Therefore, others can also bid on the house during the court hearing.
How Long After Probate Does It Take to Sell a House?
Formal probate when a deceased family member has a will should take at least six months or longer to sell a house. However, formal probate without any will can take at least 12 months.
An informal probate process, however, takes much less time. It may take only a few months to complete the home sale when using an informal probate method. For instance, in the state of Massachusetts, the court can approve an informal probate order in only seven days after the estate owner’s death.
In that case, the home sale isn’t supervised in the same way. A formal probate process requires more supervision. Nonetheless, informal probate needs a will to administer. Usually, that type of probate involves real estate co-owned with another person residing in the home. That person must have a right to survivorship.
The house deed should have that information. Essentially, widows and widowers may use informal probates to sell their properties. An informal process is also common if a piece of property was put into a living trust.
Wisconsin state law usually requires that the probate process takes no more than 18 months in total. On average, the formal probate process in Wisconsin takes six months due to the more involved court supervision.
However, with the help of a real estate agent, you can likely complete the informal probate home sale in only two or three months.
Probate Process for Real Estate in Wisconsin
In Wisconsin, any estate that costs beyond $50,000 needs to undergo the probate process unless the real estate property qualifies for specific exemptions. The exemptions a property may qualify for include:
- Life insurance policy payments
- A living trust holds all the assets
- Retirement funds with a beneficiary chosen other than the one who inherited the property
- The assets and real estate property have joint ownership with a surviving individual
A personal estate representative or executor chosen by the decedent in the will handles the probate home sale in Wisconsin. Probate costs are usually covered through the estate sale. A formal probate process requires the court to approve the costs of selling a house and asset distribution.
The estate also covers any federal income taxes and estate taxes. Wisconsin, however, does not have an estate tax. Assets given to a surviving spouse have an exemption from the estate tax as well.
The probate process involves notifying creditors, fixing possible disputes, and filing income tax returns. Creditors have four months to make a claim against the estate. The leftover amount after paying off creditors and taxes gets distributed between beneficiaries.
To ensure everything goes well and straightforward in your home sale, you may need legal advice from a probate lawyer.
Finding the Right Probate Lawyer for Your Property
Estate planning involving a probate home sale benefits from the help of an experienced probate lawyer and even a financial adviser. Does the will name an executor? If you were chosen as the executor, you may need to choose a probate attorney. When picking the right attorney, you will need to do your research.
Make sure the lawyer has expertise in estate planning and trusts. You may want to ask your friends, family, or colleagues for a recommendation when searching for a probate lawyer. Find out if anyone in your circle had a worthwhile experience with an attorney working in the probate realm.
When searching online, check out client reviews and the general aptitude of a lawyer based on their website and online articles. You may also want to look through state bar association information online to make sure the professional is in good standing.
Can You Sell a House Before Probate Is Completed
There are only very specific scenarios in which you can sell a home before completing the probate process.
The house title needs a particular description. In particular, the house title needs a joint tenancy clause where a surviving spouse or tenant lives in the home. In that case, the surviving owner gets full ownership of the home. As such, the surviving spouse has full rights to sell the home based on the market value before probate finishes.
However, any house in which the deceased person is the only one with ownership of the property cannot get sold before probate takes place.
Handling Probate Disagreements
The best ways to manage probate disagreements include communicating fully and truthfully between family members and other beneficiaries along with remaining forgiving during the process. You can also avoid probate disagreements by preparing well and having accurate estate planning documents.
Detailed documentation can help prevent disagreements between family members, as they will describe where or to whom each asset goes. The will-and-testament is the main document that an executor will need. It will help avoid probate disagreements between beneficiaries.
The person appointed as the executor will also need to keep the communication lines open between family members and update everyone on the relevant probate steps. Since the loss of a loved one is an emotional time, family members who remain forgiving and gracious during the probate process will face fewer disagreements.
Selling Your House in Probate
The process of selling a house in probate involves steps like
- Naming the executor of the estate, which is usually based on the will
- Hiring a probate attorney and petitioning the court to begin the probate
- Taking inventory of the estate and property
- Seeking assistance from a realtor experienced in probate sales
- Managing the finances of the estate and paying off all creditors/debt
- Listing the property for sale after an appraisal
- Completing the sale in a court hearing
Selling a house in probate requires you to follow specific probate laws, like completing the process in no more than 18 months. Following the information above, you can complete the home sale without too much trouble. Just make sure you get help from a successful probate attorney and an experienced real estate agent.
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