What is probate?
According to fortunebuilders.com real estate probate is the legal process following a homeowner’s death where the property either transfers ownership to someone or is sold.
In other words, it’s the distribution of assets of a deceased person known as a decedent. This goes on whether they have a will or not, when there’s no will, it’s known as an intestate case. Intestacy is defined as state laws determining how to distribute such assets. And many times, included in this assets list is real estate itself.
So while houses of the deceased person can hold, you know, a special place in the hearts of loved ones, if they can’t afford the cost, they may want to get rid of it. And this is where the investor comes in. Often if the family member doesn’t want to keep the home, they’ll sell it for a reasonable price.
And that’s where the investor really benefits from this whole process is the fact that they’re getting a home, for a reasonable price in that the person selling it just simply wants to get rid of it. And the investor will be able to buy it at a discount and, fix it up or whatever they plan to do with it.
Now, I would say there’s about five steps.to the probate process and I’m just going to walk you through it. So first there’s filing, this is where you request that the will be probated or, you know, if there is no will that, because of the intestacy statutes in a specific state that it go to court, probate court, as it’s known. “All heirs and beneficiaries.” what that means in legal jargon is the involved parties. They’re notified of this, request to go into probate court. Next, the debts and assets are located. According to Legal Zoom, once the court has appointed the executor or personal representative, they must identify and disclose all of the estate’s assets and provide a valuation.
Assets include a real estate, which is what I mentioned before, but also vehicles, investments, bank accounts, cash, personal property, intellectual property, and pets. So what gives the executor, the quote unquote stamp of approval you might call it is what’s known as a Letters Testamentary. And it’s just a document that the court gives them that says, okay, now you can begin handling the Will. It’s important to note that things in a trust are not probate assets and they’re not distributed in probate court.
So if you don’t want your possessions to be distributed in probate court, put them in a trust. Next step: pay debts. All debts and creditors must be paid. So again, this is the responsibility of the executor to find out if the deceased person has any debts with anyone and to settle those. Finally the distribution of assets, the assets are distributed either through, the will, which I mentioned before then also, which I mentioned before is the state intestacy statutes.
Every state is different, but again, that’s, if you don’t have a, will they go through the intestacy statutes. Now, the last step is closing the estate. After assets are given out and court fees and debts are paid, a petition is filed and the estate is dissolved. And what this means is that it’s the very end of the probate process.
So this is really, again, those are the, the five steps of probate. Just to review here, we’ve got, the filing, locating the debts and assets, paying debts, distributing those assets, and then finally closing the estate.