How to Determine If a Property Needs to Go Through Probate
When a loved one passes away, their estate, including any real estate they owned, must be handled according to their wishes (if specified in a will) or state law (if no will exists). A common question for heirs and executors is whether the property needs to go through probate. Probate is the legal process used to settle an estate, but not all properties require it.
Understanding the factors that determine whether a property must go through probate can save time, money, and stress. Here’s a guide to help you assess whether a property requires probate and what steps to take next.
1. Is There a Will?
The existence of a will can influence whether a property needs to go through probate, but it’s not the sole determining factor.
If There’s a Valid Will: The will often names an executor and outlines how assets, including real estate, should be distributed. However, even with a will, probate may still be required to transfer ownership legally unless the property is structured to bypass probate.
If There’s No Will (Intestate): If the deceased did not leave a will, the estate must generally go through probate so the court can determine how to distribute the property based on state intestacy laws.
2. How Is the Property Titled?
The way a property is titled plays a major role in whether it needs to go through probate. Here are some common scenarios:
A. Sole Ownership
If the property is solely in the deceased’s name without any additional designations, it will likely need to go through probate to transfer ownership to heirs or beneficiaries.
B. Joint Tenancy with Right of Survivorship
If the property is owned jointly with another person (such as a spouse) and includes a “right of survivorship,” the surviving owner automatically becomes the sole owner of the property upon the other owner’s death. In this case, probate is not necessary to transfer ownership.
C. Tenancy in Common
If the property is owned as tenants in common, each owner holds a specific share of the property. The deceased’s share does not automatically transfer to the surviving co-owner(s) and will typically need to go through probate.
D. Community Property with Right of Survivorship
In community property states, spouses may hold property as community property with right of survivorship. Upon one spouse’s death, the property passes directly to the surviving spouse without probate.
3. Is There a Beneficiary Designation?
Some properties or financial assets have built-in mechanisms to bypass probate through beneficiary designations. While this is more common with accounts like life insurance or retirement funds, certain types of property can also have beneficiaries designated.
For example, transfer-on-death (TOD) deeds or beneficiary deeds allow property to pass directly to a named beneficiary without probate. If the deceased executed such a deed before their death, the property will transfer outside of probate.
4. Is the Property Held in a Trust?
If the property was placed in a living trust or similar legal arrangement, it will not need to go through probate. The trust acts as a separate legal entity, allowing the successor trustee to transfer the property to beneficiaries according to the terms of the trust.
This is one of the most common methods for avoiding probate and ensuring a smoother transfer of real estate.
5. What Are the State’s Probate Thresholds?
Most states have simplified probate procedures for small estates, which can sometimes exclude real estate from probate entirely if the estate’s total value falls below a certain threshold. These thresholds vary by state and can range from a few thousand dollars to over $100,000.
If the estate qualifies as a small estate, heirs may be able to use an affidavit or other expedited process to transfer the property without formal probate.
6. Are There Outstanding Debts or Liens?
If the deceased had unpaid debts or if the property has liens (such as a mortgage or tax lien), probate may be required to ensure those debts are settled before the property can be transferred to heirs. The probate process allows creditors to make claims against the estate, ensuring that debts are paid before the property is distributed.
7. What If the Property Is Out of State?
If the deceased owned property in a state other than where they resided, a separate probate process known as ancillary probate may be required in the state where the property is located. This can add complexity and length to the probate process, so consulting with an attorney familiar with both jurisdictions is essential.
Steps to Take If Probate Is Required
If you determine that the property needs to go through probate, here are the next steps:
File the Will with the Court: If there’s a will, file it with the probate court in the county where the deceased lived or where the property is located.
Appoint a Personal Representative: The court will appoint an executor or administrator to oversee the probate process.
Identify and Value the Property: Obtain an appraisal or market analysis to determine the property’s value.
Notify Creditors and Resolve Debts: Pay any outstanding debts or liens attached to the property.
Distribute the Property or Proceeds: Once probate is complete, transfer the property to heirs or sell it and distribute the proceeds according to the will or state law.
When to Consult Professionals
Navigating probate can be overwhelming, especially when real estate is involved. Consider consulting with:
Probate Attorney: To ensure all legal requirements are met and to handle disputes.
Certified Probate Real Estate Specialist (CPRES): To help sell or manage real estate during probate.
Appraisers: To accurately value the property for tax and distribution purposes.
Conclusion
Determining whether a property needs to go through probate depends on factors like ownership structure, state laws, and whether the deceased used tools like trusts or beneficiary designations. By understanding these factors and seeking professional guidance, you can navigate the probate process with confidence and minimize delays.
If you’re facing questions about probate real estate, don’t hesitate to reach out to a probate specialist who can provide expert advice tailored to your situation.