Saying goodbye to a dearly departed loved one is always difficult—especially if you’re the one responsible for the property left behind. Movies and television shows make it appear as if inheriting property is as simple as an attorney reading the will, but real life isn’t that simple.
According to the American Bar Association, “Probate is the formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries.”
This means that you’ll need to go to court several times before the probate inheritance becomes legally yours. That’s why the first important step you need to take after inheriting property is to hire a team of expert probate professionals.
The 3 Key Players in Probate Inheritance
Player #1: The Probate Attorney
The first person you need to contact when you inherit property is a good probate attorney.
A probate attorney will tell you what documents you need for court, draft and file the probate petitions, and speak on your behalf to the judge presiding over your case. Your attorney can also advise you on the steps you’ll need to take throughout the probate process.
When selecting your probate attorney, the first questions you need to ask are about their probate experience, such as how many cases they’ve handled and how long they’ve been practicing probate law.
If your probate case has special circumstances, such as farmland that needs harvesting or a tenant residing in the probate property, you should ask the prospective attorneys if they have handled cases similar to yours. You may even want to check their references by asking to speak to satisfied clients.
Also ensure that yours is a transactional lawyer who specializes in handling the administrative, paperwork side of probate—which is the majority of the work in most uncontested probate cases. You’d only need a probate litigator if there are contested matters that require litigation.
Finally, make sure you have a good rapport with the attorney you select. You need to feel comfortable communicating with your attorney because the probate process is so lengthy.
According to Sacramento-based probate attorney John Palley, who has been awarded Martindale-Hubbell’s prestigious “AV” peer review rating, “Many states, like California, are in a traditional, formal probate process with a timeline that takes six or seven months to a year or more on the long end.”
One of the reasons the probate period lasts so long is because of the inherited property.
Player #2: The Probate Real Estate Agent
When you’re lost in bereavement and the complexities of probate, it’s natural to look to the familiar—such as hiring your favorite real estate agent. But unless your favorite agent specifically handles probate properties, this is a mistake.
While most probate sales functions similarly to a traditional sale, there are some key differences that require specialized know-how. A probate real estate agent will know how to handle these differences, such as selling a property that requires court confirmation or drafting contracts when the probate property is still in the decedent’s name.
If you don’t live near your inherited property, you’ll need to hire a probate agent who’s local to the property rather than you. This ensures that your agent knows the laws and ordinances of the property’s home state, city and county that may impact your sale.
For example, if your inherited property has a current tenant with a lease agreement, your probate agent will know if local regulations allow leases to be broken upon the death of the property owner. If not, your probate sale may have to wait until after the lease is up.
When you’re interviewing agents, checking up on their probate experience is the top priority. Find out how many probate properties they’ve sold within the last year and if the homes shared similarities with yours, such as size, value and location.
While not always necessary, it’s also beneficial if your agent is certified to handle probate sales. Trained by the U.S. Probate Services, a Certified Probate Real Estate Specialist (CPRES) has specialized knowledge needed to deal with the complicated issues that sometimes arise during a probate sale.
Before you can list your inherited property with a probate agent, you first need to be granted rights by the probate court. However, while you wait for those rights, you can connect with an agent immediately.
During that period, the agent can help you with an assortment of important tasks such as giving you a market update, determining the property’s value, and discussing what needs to be done to get the property ready for the market. Delaying the discussion with a probate agent can potentially lead to a delay in the overall probate process.
Player #3: The Personal Representative
The personal representative is the person responsible for transacting the final business of the decedent’s estate and distributing the estate’s assets to its beneficiaries.
Often this is you—especially if you are the sole inheritor, if you filed the Petition for Probate, or you are named as the executor in the will.
In some cases, such as contention between beneficiaries, a contested will, or if the beneficiaries live out-of-state, it’s best to hire an outside party to administer the estate.
Known as a professional fiduciary or a paid executor, this individual serves as neutral, third-party representative of the estate. The fiduciary operates without the skewed perspective that relations of the decedent might have while inventorying, selling and distributing the estate’s assets.
“The professional fiduciary acts as the personal representative and puts the burden off of the family members and then they don’t have to worry about it. They can just wait until it’s over and then checks will arrive,” says Palley.
Several states, like California and Arizona, have organizations to help individuals find the right professional fiduciary. Most probate attorneys will also have recommendations for professional fiduciaries who have worked well for them on previous cases.
These three key players play important roles during the major stages of the probate process.
The 3 Phases of Probate Inheritance
While there are numerous steps to the probate process, the timeline can be broken down into three main phases: Pre-Petition for Probate, Administration of the Estate, and Closing the Estate.
Pre-Petition for Probate
The first phase takes place before your attorney has filed a Petition to Probate with the probate court. Until this first hearing, you are not yet the executor or personal representative even if you are so named in the will. This means that you have no legal authority to take any action in regards to the estate.
At this time, you are simply gathering the decedent’s documents that you need to file the petition. While probate law and document requirements vary from state to state, in most cases you will need a copy of the death certificate, the original will (if available) and the formal petition forms as prepared by your attorney.
Typically, the court hearing on the probate petition is scheduled for several weeks or months after the initial filing. During that waiting period, you don’t have authority to take action with the decedent’s estate, such as distributing assets or signing a listing agreement with a real estate agent.
However, you can and should maintain the property, select your probate agent and send out a notice of probate to beneficiaries and creditors.
If you can’t or don’t want to wait several weeks or months for the scheduled hearing, you may ask your probate attorney to file for an emergency ex parte hearing to ask that you be named as the personal representative immediately. However, your request may not always be granted.
“Some courts like my home court in Sacramento County, only will issue the ex parte order if there is some urgent nature,” says Palley. “For example, if the house is in foreclosure and there’s a foreclosure sale date coming, that would be urgent.”
Administration of the Estate
Once the first probate hearing arrives, the court will grant you or your professional fiduciary letters of administration if there is no will, or letters of testamentary if there is a will. These letters grant the personal representative the authority to transact business on behalf of the estate.
During this phase of administration, all of the final business affairs of the decedent will be conducted to settle and dissolve the estate. This includes paying settling debts, filing the final tax return, distributing bequests according to the terms of the will and selling the house.
In order to pay the decedent’s debts and receive funds into the estate (such as a life insurance policy payment), you may need to set up an estate account.
To ensure that all of the decedent’s debts and assets are accounted for, you’ll need to do a formal inventory of the estate. This includes everything from property, heirlooms and jewelry to bank accounts, stocks and life insurance policies.
This needs to be completed using the official estate inventory forms issued by your probate court. The inventory will become a key record for the court to ensure that all the assets and debts have been accounted for and addressed.
Of course, selling the inherited property is the biggest undertaking during this phase and it will take the longest amount of time. How this probate sale happens depends largely upon the administration rights you’ve been granted by the court.
Probate sales by personal representatives with independent administration rights function much like traditional sales, with only subtle differences in contracts, forms and disclosures.
If you’re operating only with dependent administration rights, your probate property sale will need court confirmation before the deal can close. A real estate agent with probate experience and training is especially important in these situations.
At the confirmation hearing, your attorney will present the offer you’ve accepted, but the court will not automatically accept that offer. In order to ensure that the property sells for the highest amount possible, the court opens the overbid process.
Overbidding functions much like an auction, with the court starting the bidding process at a percentage above the presented offer. The court will then accept the best offer and confirm the sale at the hearing.
Once the funds from the property sale are deposited in the estate account, they may be used to pay debts against the estate, such as taxes and creditor claims. Any remaining funds will be distributed to the beneficiaries of the estate at the closing of the estate.
Closing the Estate
The final accounting is a detailed report that will show the documentation of all legal and financial transactions that took place during the administration of the estate. This report will include the formal inventory, records that show any debt claims paid, and all the documentation from the house sale.
Your probate attorney and real estate agent can assist you in gathering all the necessary documentation. Your attorney will then file an affidavit requesting that probate be closed.
This affidavit will include the final accounting report for the court to review. Provided that all of your estate accounting checks out, the court will grant the probate closure. At that time, estate funds are then used to pay court costs and attorney fees, with the remainder distributed to the beneficiaries.
When you receive a probate inheritance, the complicated probate process has the potential to deepen and extend the grief as the proceedings drag on. But if you assemble an expert team of probate professionals, you can say goodbye to your dearly departed with grace and dignity.
This article is not a source of legal advice. Please consult a legal professional for legal assistance.