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Transferring Title When a Property Is In Probate
By Barbara Pronin
Probate is the procedure by which a court determines who is entitled to the assets of a person who has died. A probate sale refers to the sale of property that was owned by the deceased person.
 
If there is a will, a representative of the deceased can submit the will to probate, and the property will be transferred according to the terms of the will. If the person has died intestate – meaning without a will – then the property will be awarded by the probate court in accordance with the laws of “intestate succession.”
 
From the standpoint of escrow – and for most buyers – the existence of a will makes transfer of title easier. When a will is submitted to probate, the court will appoint an administrator or executor to carry out the decedent’s wishes and will notify the heirs and creditors of the probate proceedings. Once the creditors have been paid, the remaining assets are distributed as set forth in the will and the court will issue an order regarding title and ownership of the property. The court-appointed administrator or executor is authorized to conduct the sale on behalf of the estate.
 
In essence, much as in a standard sale, the order authorizing the probate sale can be recorded just as a deed would be, and title will then be clear when probate closes. (In some jurisdictions, like California, an heir or heirs may even petition the court to order title to be recorded before probate closes, under certain circumstances.)
 
It is worth noting that:
  • Problems can arise when a will is not probated. If the property changes hands as set forth in the will, but legal title has not been transferred by a probate court, the new owner may have difficulties when he/she wants to sell it because legal title is still in the name of the deceased.
  • When both spouses legally hold title to the real property, when one spouse dies, then transfer of title to the surviving spouse may occur without probate. However, if the surviving spouse was not named on the original deed, and the property was the decedent’s separate property, then ownership is determined either by the deceased’s will or by the laws of intestate succession (in the absence of a will). 
Real estate agents need to understand that the process of selling property that is in probate will inevitably be more complicated and lengthy than a conventional sale. Once the court assigns an administrator or executor for the decedent’s estate, an ‘Order Confirming Sale’ must be issued, basically stating that the listing price is fair and authorizing the sale. A certified copy of that document will be required in order for the transaction to close.

Among the challenges presented by probate sale listings are negotiating extended escrow periods and disclosing to clients that the court probate process may take from 60 days to six months or longer to be completed.
 
Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

This material is not intended to be relied upon as a statement of the law, and is not to be construed as legal, tax or investment advice.  You are encouraged to consult your legal, tax or investment professional for specific advice.  The material is meant for general illustration and/or informational purposes only.  Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy.


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