Transferring the Title to Real Property During Probate
If you have been named the executor of an estate, you may be wondering how probate will affect the transference of real property from the estate to the heir. Indeed, probate itself can be confusing with all of the legal requirements, laws, and family expectations you may already be dealing with in your role as executor. If you decide to forge ahead without the aid of a probate lawyer, there are several aspects of the process which are important to understand.
As the estate’s executor, you will be required to file certain documents with the probate court before you will be authorized to transfer or liquidated the estate’s assets to the designated heirs. If the estate includes a home or undeveloped land, you must first reconcile any outstanding mortgage debt, liens against the real property, and any other estate debts and pay them from the estate’s funds. Once you fulfill these responsibilities, you will be able to transfer the title. That is the overview. Here are more of the details, though they may vary from your circumstances somewhat. If you are unsure about any aspect of the probate process or if you are uncomfortable fulfilling the role of executor, consider consulting a probate lawyer, like a probate attorney in Phoneix, AZ, who can ensure that you complete the process without any legal loose ends or other concerns.
File a Petition with the Probate Court
Before you begin to release funds from the estate’s checking account to the heirs, you must document all of the decedent’s assets (along with their value), and their debts. Next, you must file a petition with the probate court that includes your name, the decedent’s name, and the designated heirs as per the decedent’s will. You must also include which assets each of the heirs is to inherit. You must also include the total value of the estate.
- Combine the estimated value of all the estate’s assets (including real property, personal belongings, valuable artwork and jewelry, vehicles, etc.) to determine an amount.
- From that amount, subtract the estate’s outstanding debt such as the balance of the real property’s mortgage, credit card balances, etc.
- In the probate court petition, specify the estate’s estimated value less its outstanding debt.
Pay the Estate’s Debts
Before the probate court judge will authorize you to release the assets to the heirs, you must first pay off the estate’s debts. This includes taxes, car loans, credit cards, and mortgages. If there are insufficient funds in the estate’s checking account to pay off the debts, it may be necessary to sell the home. Once the home is sold (liquidated in this context), then the remainder of the debts can be paid. However, the probate court must supervise the process of selling the home. Should it be necessary to sell the house or other real property, the title to those sold properties will go to the buyers rather than to the heirs. If there are funds leftover from the sale of the home after the debts have been paid, unless otherwise specified in the will, it may be possible for the heirs to inherit those funds.
Transferring the Real Property’s Title to the Heir
The local or municipal agency that handles title transfers varies from one city to the next. In your city, it may be the county recorder’s office. In effect, the title is transferred when the new title is submitted to the agency. Usually, if no money is exchanged to acquire the property, then registering a title deed is adequate. If the home is sold, the process requires a grant deed. Either type of deed must be signed and notarized. There will be title filing fees, and if it is a probate title transfer, you will need a certified and original death certificate.
Thank you to the experts at Kamper Estrada, LLP, for their insight into probate law.