How Do I Know If I Need To Probate A Property In Order To Sell It?

Probate refers to the administration of the property of a decedent’s estate. In turn, the property of the estate is generally all the property that doesn’t pass to beneficiaries and others – through other means. Many assets do pass outside of probate if there are proper legal documents in place. Example documents include the title to the property, trust agreements, insurance proceeds, and other documents. There are often different documents for real property, for businesses, and personal property.

Any disputes as to whether a property needs to go through probate can be brought before the probate court. Generally, if the property does not go through probate, you do not need the approval of the probate court to sell it.

The best way to plan your estate including which assets go through probate is to consult with a Vero Beach or Sebastian Florida estate planning lawyer.

What legal instruments determine the need to probate property?

The will

Generally, the following legal documents/issues help determine how property transfers from the decedent to another person or persons – when someone dies.

A will should identify the property that belongs to the decedent and who is the beneficiary of that property.

The last will and testament also should appoint an executor. Property that passes through a will generally must go through probate.

Probate and the intestate laws of Florida

If the person who dies is Sebastian or Vero Beach does not have a will, then the intestate laws of Florida determine which assets are part of the estate and which people/entities should receive their share of the estate assets.

Titling of property and probate

A title document identifies the property, who owns the property, and whether there are any other interests in the property – such as a mortgage or an easement. Title to property normally includes real property. It can also include personal property such as cars, trucks, and bank accounts.

Life insurance and probate

These contracts provide that funds should be paid when the decedent dies. The funds are paid to the estate and pass-through probate – unless the beneficiaries are named on the policy documents.

Trust documents as a way to avoid probate

This document is normally set up by the decedent during his/her lifetime. The trust requires the description of the trust assets, the naming of a trustee, and other formalities. Trusts are useful for children or family members with special needs. They can help minimize taxes and prevent creditors from seizing the trust assets.

Whether Vero Beach or Sebastian property in a trust passes through a trust or not – for purposes of probate – is complex. There are specific formalities the trust must meet – to avoid the need for probate

What does it mean for a property to be in probate?

When the decedent dies, a personal representative handles the estate asset, If there is a will, the personal representative is the executor/executrix of the will. If there is no will, then someone (usually a family member) has to seek court approval so the court can appoint them as a personal representative.

The personal representatives’ main duties are to:

  • Identify the property that goes through probate
  • Value the property
  • Identify the debts and obligations of the decedent
  • Determine the value of these debts and obligations
  • Create an estate checking account
  • Arrange for the sale and/or transfer of the probate assets
  • Arrange for the payments of all the debts
  • Account for all the financial transactions
  • Obtain court approval of all the transactions and court approval for any remaining transfers

Common steps to avoid probate of real property

The main way to avoid probate of real property in Vero Beach or Sebastian is the titling of the property. Real property titles include:

  • Tenants in entirety. This is for spouses. Tenants in the entirety mean both spouses own the property. When one spouse dies, the surviving spouse owns the real property.
  • Joint tenants with right of survivorship. Like tenants in the entirety, both tenants own the property. When one survivor dies, the remaining survivors own the share of the decedent.
  • Tenants in common. Here, each owner only owns a proportional share. When the owner of one share dies, the owners are generally the heirs of that person.

Property that has the title format of tenants in the entirety and tenants in common does not pass through probate. The survivors should, however, work with a premier real estate lawyer, to formally retitle to the property.

Tenants in common real property do pass through probate.

Common steps to avoid probate of business assets

Anyone who has concerns about the transfer of their business should review their legal options. There are ways to transfer business assets without probate such as:

  • The titling of shares of stock
  • Drafting partnerships agreements
  • Using trust and other documents to transfer business assets

Common ways to avoid probate of personal assets

In addition to life insurance policies, IRA assets, and bank accounts, naming beneficiaries or titling documents to include either the right of survivorship or a transfer on death designation – can help avoid probate.

Trust documents are useful in the handling and transfer of personal property too.

What happens if a property is in probate?

If real estate, personal property, a business, or any assets is in probate, then the property is transferred only after approval by the court that handles the administration of the estate – such as the Florida Probate Court. It’s generally best to hire an experienced Sebastian or Vero Beach Florida estate lawyer who guides the executor/personal representative through each phase of the administration of the estate.

Generally, the personal representative will advertise the death of the decedent. All the probate assets and all the debts of the decedent will be identified. The personal representative will file an initial inventory of the probate assets. The personal will representative will arrange for the value of the probate assets to be determined. This can be done by using professional appraisers and/or documents that show the original sales price of the property.

Transfer of real property through probate

Generally, the personal representative(s) will arrange for the property to go through a sale. For real property, the executor or representative will arrange to sell the property through a real estate broker. Transfers of personal assets are usually made directly to the beneficiaries. Alternatively, transfers of real property may be made to an heir. For example, if a spouse is still alive, and the property was just in the name of the decedent, arrangements may be made to transfer the home to the spouse. When it comes to real estate, any mortgages, utility bills, and other real property debts are paid at the real estate settlement.

It is usually best if the appropriate estate court signs an order approving the sale of the real property. Otherwise, the buyers are risking that disputes may arise among the heirs and/or creditors as to the transfer of the real property.

Also, buyers should obtain title insurance whenever buying a real property that is in probate.

Transfer of personal property through probate

For personal property, a son or daughter may take possession of various items of furniture. If there are items that the beneficiaries or heirs do not want, then arrangements are made to sell those items.

The proceeds of all sales require an accounting. The financial proceedings are put into an estate account.

The final approval of the distribution of the property requires either court or approval or an agreement among the heirs.

Additional probate property considerations

Many complex factors determine what property is probate property, what authority the personal representative needs to sell probate property, what notices you need, and other issues.

Besides, while the property is in probate, there is still the need to pay any taxes, mortgages, homeowner’s insurance, and utility bills. Generally, a family member or even a tenant can live in the property – though it is wise to have some type of lease or other written contract confirming the arrangement.

There are pros and cons to the use of trusts and other methods to avoid probate. For example, you may lose some control of the property or have to share the property to avoid probate.

Gifts may be a way of transferring property before the decedent dies.

To discuss estate planning and probate, call the skilled Florida real estate lawyers at Lulich Attorneys & Consultants today. You can contact us at 772-589-5500 in Sebastian, at 772-7747-7771 in Vero Beach. You can also use our online contact form to schedule an appointment.