What Happens During Probate

By Bart Bartels, Mortgage Loan Officer

Probate is the judicial process whereby the last will and testament of a loved one is validated as a public document in a court of law, or in the case of an individual not having a will, the matter of settling the estate according to state law.

The first step in the legal process is granting probate to administer the estate of a deceased person, resolving all claims and distributing the deceased person’s property under a will. The legal validity of a deceased person’s will is determined by the probate court and it grants approval, also known as granting probate, to the executor. The executor, generally named in the will, possesses the legal power to distribute the loved one’s assets as specified by the will.

In regards to homeownership, here are three of the most common scenarios for an estate property, and what can happen to the house.

1. Property transferred in probate to heirs listed in the will

In the event a decedent left a will to transfer the property to family members, the executor will need to carry out the loved one’s wishes, including conveying the home to the will’s beneficiaries. The judge will transfer the property to the heirs, who can then choose to keep or sell the house. The property can be split amongst the heirs, leaving open the possibility of one sibling buying out the interest of the others.

2. Property conveyed to surviving spouse, children, or next of kin

In the case of a will not existing and the house not being transferred through a trust or joint tenancy law, the house must be conveyed through probate court after a judge names an immediate family member as executor. This is called intestate probate. In this case, the judge may transfer property according to the state’s succession laws.

3. The executor of the estate sells the property with probate oversight

If the deceased left a will but named no beneficiary of the house, the executor of the estate will need to sell the home. This process can vary depending on the state but generally, the house is listed and sold like a traditional sale. The proceeds are then transferred to beneficiaries via the probate process.

When it comes to probate and the possibility of being named a beneficiary in a will, there are a couple of points to keep in mind. The first is that death does not release a mortgage. Those that inherit the property will take over or assume the mortgage payments. This can be an unpleasant surprise if there is little or no equity in the house. Secondly, probate can be avoided by utilizing living trusts or adding beneficiaries to the title automatically upon death. Considering the time and expense that probate can take, it may be worth consulting an attorney about probate options instead of avoiding the process.

If you have any questions, our team is here to help. Contact us here.