What Should You Do If A Home Sale Is Delaying Probate?
If your last surviving parent has recently passed away, you and your siblings may be in the midst of the probate process -- gathering assets and debts and using your parent's will (or the intestate distribution laws of your state) to divide property among all eligible heirs. However, if your parent's home is in an area with a soft housing market, or if one of your siblings is dragging his or her feet on approving a listing price, you may fear that you'll never get this home sold and be able to collect your inheritance. Read on to learn more about the steps you can take when it seems the sale of your parent's home will keep probate pending indefinitely.
What happens when probate is closed?
During the probate process, the decedent's assets are liquidated and used to pay off debts of the estate (like funeral costs, property taxes, or certain types of loans). Any funds remaining will be divided among named heirs under the terms set forth by the decedent's will. Some physical assets (like jewelry, family heirlooms, and even real estate in some situations) may be divided among heirs without having to be liquidated first.
In order to close probate and make a final distribution to all heirs, all estate property must be accounted for and in a form that can be divided among heirs. This can mean getting appraisals of non-cash or securities items to ensure their accurate value is being used in calculations and selling any items or property that will need to be liquidated -- including a home. Unless the decedent's home was held in a trust that allowed it to pass outside of probate or was directly willed to a specific heir, it's likely the home will need to be sold before probate can be closed and checks can be issued to those who inherit.
What should you do if the closing of probate is being delayed due to a home sale?
There are a few steps you and your siblings may be able to agree to take if you're anxious to get your parent's home sold and probate closed.
The first is to calculate the probable sales price and determine whether one heir may simply "buy out" the others by taking the home as an inheritance. For example, if you and three siblings each get 25 percent of your parent's estate, with cash balances valued at $300,000 and a home valued at $100,000, one sibling may be able to accept this home as their inheritance and allow the remaining siblings to equally split the $300,000. This can be a particularly good option if one sibling has an emotional attachment to the home or is dragging his or her feet when it comes to selling the home.
If your parent's estate isn't insolvent, you and your siblings may also be able to agree to accept a lower-than-market price for your parent's home simply to get it off the market. Doing this can help speed up the process even in a down market, and the convenience of having a probate check issued quickly can make up for any potentially higher price this home may have fetched in the future. For more information, contact a probate attorney like David R Webb Attorney.