How Is Real Estate Handled In Probate?

Navigating real estate matters in probate can be overwhelming, especially if you’ve been appointed as the personal representative. You may be at a loss as to where to start, and what decisions to make in certain situations.

Even more challenging is resolving conflicting interests among family members and satisfying creditor claims. Ultimately, you will need to balance the various demands and priorities of all parties involved to ensure that the probate process goes as smoothly as possible.

This article will help you understand the nuances of the probate real estate process, but if you’re uncertain, consider consulting a probate attorney.

Who Is Allowed To Manage The Real Estate?

If there is a will, the loved one may have nominated someone they trust — an executor — to manage the estate. They will be authorized to decide on estate matters but only after the Probate Court accepts the will.

When there is no will, the family members will nominate someone to become an administrator. The administrator will only be authorized to act once the court has appointed them to their position.

If the family members cannot agree on a representative, the court will take over and appoint someone as administrator to handle the estate, including real estate. The same can also happen when a previously appointed administrator was removed for mismanaging the estate.

If another person is listed on the property’s deed aside from the deceased, they may also have the authority to manage the real estate.

What Happens To Real Estate In Probate?

Real estate can be one of the most challenging areas to manage. You will have to determine who gets the property, whether or not you should sell it, and how to distribute the proceeds.

When the deceased is the sole owner of the real estate, it will have to go through probate, and the court decides who can sell, keep or transfer it.

On the other hand, if there is a co-owner, the real estate may be considered a non-probate asset. Depending on how the deed is titled, the surviving owner might take ownership of the property, and may not have to go through probate.

What Happens to Real Estate When There Is More Than One Person Listed on the Deed?

The deed will determine whether the property becomes part of the deceased’s estate or not, and it could be titled in different ways:

Joint Tenants with Rights of Survivorship (abbreviated as JTWROS)

Real estate titled as joint tenants with rights of survivorship automatically transfers ownership to the surviving owner when one of the owners dies. The transfer will be automatic and the property will be excluded from the estate and probate.

Tenants-in-Common (TIC)

When real estate is titled as tenants-in-common, it becomes part of the deceased person’s estate and will need to go through probate to be passed on to their heirs or beneficiaries.

There can be situations, however, where heirs cannot inherit the property, such as when creditor claims exceed the assets of the estate. When this happens, the personal representative may have to sell real estate to pay them off.

To sell the deceased owner’s property, the court should have granted the personal representative certain expanded powers. If this isn’t the case, they will need a separate petition to gain the court’s permission to sell the property.

Can You Sell the House During a Probate Process?

In Georgia law, yes. However, before selling the house, there are considerations and legal processes. We recommend that you consult your probate attorney to ensure you go through all the necessary steps.

When Can You Sell Probate Real Estate?

For real estate titled tenants-in-common:

The Probate Court must appoint someone first to manage estate affairs before any property can be sold. This is the first step according to the probate legal process in Georgia.

Once the executor or administrator (both known as a personal representative) accepts the role, they will receive a court order that outlines their authority, including any expanded powers that grant them permission to sell estate property.

If the court order did not grant them expanded powers, they would need a separate petition for leave to sell to gain permission to sell a property.

For jointly owned property:

In a jointly owned property, the deed lists another person as a co-owner. After one of the owners dies, the other person will automatically become the sole owner and can sell or transfer the property.

How Long Does A Probate Sale Usually Take?

Assuming there are no disputes that would cause delay, the process typically takes 6-12 months. That’s because the property will have to go through certain probate proceedings such as property appraisal and paperwork.

Do You Need to Hire A Real Estate Agent Or An Attorney To Handle The Sale Or Transfer?

If your goal is to simplify the complex sale and transfer process, we recommend hiring professionals to assist you.

Having an expert in your corner saves you the trouble of fumbling through the steps and helps you steer clear of violations as you carry out your duties as a personal representative.

Determining The Value Of Probate Real Estate

Before selling any property, Georgia Probate Court requires an appraisal. Estimating the value of a property means considering factors like size, location, and condition.

It is best to hire a professional appraiser to determine the real estate value as it can be tricky to do it yourself. If you need help finding an appraiser, you can ask for a recommendation from your chosen real estate agent.

Are There Any Limitations On Who Can Buy Probate Real Estate?

Buying probate real estate can sound appealing to real estate investors, especially those who specialize in house flipping because they can buy the property at a bargain.

Fortunately, anyone can purchase probate property with the court’s approval.

How Are The Proceeds From Selling Probate Real Estate Distributed?

Before distributing assets (including the proceeds from the sale), Georgia probate law requires the personal representative to use them to pay off estate debts. You should ensure that you have satisfied all the creditors, or you can become personally liable for any unpaid claims.

Whatever remains from the probate sales — if any — will be split among the heirs or beneficiaries as outlined by Georgia probate law. To avoid making costly mistakes, consult an experienced probate lawyer, as disagreements often happen during the distribution phase.

What if Some Family Members Don’t Want to Sell Property but Others Do?

Conflicts of interest add another layer of complexity to the process, but it does happen from time to time. If you are the personal representative, your actions will depend on these circumstances:

If a will exists:

After the Probate Court accepts the will and appoints the executor, the executor must satisfy all the creditors before transferring any property. Without enough assets to pay what the estate owes, they may have to sell the property.

If the real estate property remains intact after paying creditors, the executor will now have to consider how the will describes the family member:

• If the will says that the property should go to a family member who wants to keep it, then the executor can transfer the property by creating a new ownership document.
• If the family member who wants to keep the home is one of several beneficiaries, they can consider buying other family members out of the house. The property will then be priced at fair market value.
• If the family member is not a beneficiary of the property at all, they can consider purchasing the property from the estate with the price at fair market value.

If there is no will:

The Probate Court will need to appoint an administrator to manage the estate.

The administrator will have to pay all outstanding creditors out of the estate assets. If the assets come up short, they may have to sell the property to pay off the debt.

After that, the family member who wants to keep the home may consider buying the remaining heirs out of their portion. If the heirs cannot agree on a fair market price for the interested buyer, selling the property may be an option to give everyone their fair portion of the estate.

What to Do If Heirs Decide To Keep The Property

If you are the personal representative, you must outline and pay estate creditors before transferring any probate property. This rule applies even when there is a will.

Once you’ve paid all the creditors, you can transfer the property pursuant to the will or the heirs under Georgia law.

One exception is when the property is titled Joint Tenancy with Right of Survivorship. If this is the case, property ownership interest will transfer to the surviving owner named in the title without probate.

Your Next Step

Real estate management in probate can be tricky, especially if you need clarification on the nuances of the process. It’s best to consult with an experienced probate attorney.

Our office is open to any questions or concerns about estate administration. You can reach out to us at (770) 796-4582, and we would be happy to assist you.