We are often faced with selling property after an owner has died. Every situation is different, but here are a few basics you should know. The following are examples starting from the quickest and easiest to the more time consuming and difficult.
Joint Tenancy with Right of Survivorship
Property owned in joint tenancy with the right of survivorship automatically passes to the surviving owners when one owner dies. No probate is necessary. Joint tenancy can be used when couples (married or not) acquire real estate, vehicles, bank accounts or other valuable property together.
Property Held in A Living Trust
A Living Trust is basically an alternative to a will for the property held in the Living Trust. A decedent creates a Living Trust before death, just like a will. Title to property is transferred to and held in the Living Trust and beneficiaries are named. The creator of the trust is the initial Trustee and has the power to sell it as the Trustee while the initial Trustee is alive. In the Living Trust document, a successor Trustee is named and the beneficiaries of the living trust are named. Except for the Joint Tenancy with Right of Survivorship, this is the easiest way to transfer property after death without the property going through probate court. No probate, no court and no judges are involved. The property can be promptly transferred to the beneficiaries. The Living Trust is becoming very popular, for good reasons.
If Tom Thompson is the owner of property held in a Living Trust and he wants to transfer it during his lifetime, he would execute a Purchase and Sale Agreement as Tom Thompson, Trustee of the Living Trust of Tom Thompson. If there are 2 or more trustees in the living trust, both or all must execute purchase agreements and closing documents. The closing attorney will request the living trust document and will examine it prior to closing to be certain the document includes proper authority to sell.
Property of a Decedent That Died With a Will
An estate with real property that is NOT a part of a joint tenancy or in a Living Trust will have to be administered by the probate court or “go through probate.” If the will names an Executor with expanded powers, including the power to transfer real estate, then the Probate Court is petitioned by the Executor or Executor’s attorney for a “Letter Testamentary.” When the “Letter Testamentary” is granted, the Executor can legally sell the property as the representative of the Estate.
If an Executor is not named or the Executor was not granted the expanded power to sell property in the estate, then the Executor has to petition the court for leave to sell and the court then has to grant permission to sell. It can get complicated. Before granting permission to sell, the court must notify all heirs or beneficiaries and ask for any objections to the court granting an ability to sell to the Executor. If there are objections, a hearing may be required. The Executor cannot sell the property until the process has concluded. Obviously, the process of obtaining court permission to sell in a limited power situation is time consuming and expensive.
Property of a Decedent that died Without a Will
The proper term for the situation of death without a will is that the party died intestate. Georgia law controls the distribution to beneficiaries of an intestate estate. The representative for the estate is called an Administrator. The probate court names the Administrator, who performs the same functions as an Executor.
How long does all of this take?
Joint Tenancy with Right of Survivorship and Property Held in A Living Trust are the quickest and easiest ways to transfer real estate. Assuming no complications, property can be sold almost immediately with Joint Tenancy and Living Trusts.
Other property that goes through probate, particularly property in an intestate estate, can take months to years. If a seller comes to you with Letters Testamentary or Administrative Letters already in their possession, you can list and sell right away. Otherwise, count on a significant delay.
Note: Probate cannot be avoided entirely. Even if all of the property, including real property, cash, stock and insurance policies, in an estate can pass directly to the joint partner and beneficiaries, the probate court still requires that a will be validated. The probate court must also approve any requests to avoid probate.
Moral of this article: Before you list and sell real property after an owner’s death, be certain that the Executor or Administrator has the proper authority to sell in the form of Letters Testamentary or Administration. If in doubt, contact one of the Broker Team or your closing attorney!
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