What Happens to Real Estate in Probate?

Probate is a legal process that surprises people, especially when real estate is involved. At Oram Law, we often hear questions like: What happens to a home when someone dies? Does the family get it automatically, or must it be sold?

The answer depends on a few things, like if there’s a will, who the legal heirs are, and how the property is titled. Here’s a simple look at the most common ways real estate is handled in probate.

Understanding Probate and Real Estate

Probate is a court process that ensures a person’s will is valid, pays their debts, and gives their property to the right people.

If a home is only in the person’s name and not in a trust or jointly owned, it usually has to go through probate, even with a will.

This process can take months or even years, depending on the situation and state laws. The court pays close attention to the home because it’s often the most valuable part of the estate.

Real Estate is Transferred to Heirs via a Will

If there is a will, it usually names someone to manage the estate (the executor) and the people who will receive the property.

The executor must get permission from the court to handle and transfer the property.

After approval:

1. A spouse might get the home.
2. Children may share it and decide together what to do.
3. If children are minors, a guardian or trustee may be chosen to manage it.

A will helps guide the process, but the court must still be involved.

Real Estate Passes to Next of Kin Without a Will

If someone dies without a will, the state decides who gets their home.

The court picks someone to manage the estate and decides how to divide the property if there is no plan, such as joint ownership or a transfer-on-death deed.

The home usually goes to:

1. The spouse
2. The children
3. Other close family members, like parents or siblings

This process can take longer and be harder if family members disagree.

The Property Is Sold Through the Probate Process

Sometimes, the best or only option during probate is to sell the home. This can happen if:

1. Heirs can’t agree on what to do with the property
2. The estate has debts that need to be paid
3. The will says to sell everything

In this case, the executor or court-appointed person handles the sale under court rules. Steps usually include:

1. Work with a real estate agent who has experience in probate sales.
2. Getting inspections, appraisals, and preparing the home for sale
3. Accepting an offer and setting a court date for approval

Some states require a court hearing before the sale is final. In such cases, other buyers may be allowed to make higher bids.

Money from the sale first goes to pay any debts. Whatever is left is then given to the heirs based on the will or state law.

Can Real Estate Avoid Probate?

Yes, real estate can avoid probate if set up correctly or included in an estate plan. Some common ways to do this are:

1. Living Trusts: Property in a trust goes directly to the beneficiary, skipping probate.
2. Joint Tenancy with Right of Survivorship: The home automatically goes to the other owner when one dies.
3. Transfer-on-Death (TOD) Deeds: The home transfers to a named person after death without going to court.
4. Community Property with Right of Survivorship: In some states, a married couple can set up their home to go straight to the surviving spouse when one of them dies.

These tools help ensure the home transfers easily and avoid the time and cost of probate.

Dealing with Items Inside the Home

Everything inside the home, including furniture and personal items, is part of the estate. The executor must make a list, protect valuable items, and decide whether to give them to family or sell them.

Nothing should be touched or taken until probate starts and an executor is chosen.

What Executors and Heirs Should Know

1. Mortgages still need to be paid: Inheriting a home doesn’t erase the loan. The new owner must keep making payments.
2. Taxes on profit: If the home gains value and is sold later, there might be a capital gains tax.
3. More than one home? Probate might be needed in every state where the person owned property.
4. It takes time: Handling a home through probate can be hard, and may need help from a lawyer.

How Oram Law Can Help

Many families value their homes. However, dealing with probate can be difficult and stressful if they are unsure what to do.

Oram Law is here to help. We work with families, heirs, and executors to make the probate process easier. Whether you plan to keep or sell the home, we’ll guide you every step of the way.

Need help with probate or estate planning? Call Oram Law today.