When a person dies, the property owned by the deceased person—alone, or in the names of the deceased and another person without survivorship rights—finds its way to the county probate court.
If the deceased person co-owned property, and the living co-owner holds a right of survivorship, probate is not an issue for the real estate. The asset passes to the surviving owner upon presentation of a certified copy of the former owner’s death certificate. In other words, the surviving co-owner absorbs the share of the person who has died.
Yet many people die as the sole owners of real estate, which then becomes probate property.
The Property and the Process
If the person who died planned well, there is a valid, up-to-date will for the probate court to execute. The executor lists the real estate in the inventory of the estate. Depending on the law of the state where the real estate exists:
- The title to a home may automatically pass to the will’s named beneficiaries; or
- The court will accept a petition to approve the transfer of real estate left by the will to specific people. A court order containing the property description effects the formal distribution.
In some cases, the executor must sell the property to divide the proceeds or to pay the estate’s debts. The court may grant a petition for the sale of real property to a willing buyer. When a court-ordered sale of property closes, the executor can direct the proceeds to the creditors and heirs.
Intestacy: When State Law Controls
In some cases, no will is available when the property owner dies, despite the required good-faith and thorough search. If the deceased left no will, the court will grant a petition to declare the estate intestate. Then, state law dictates the applicable order of succession to the property rights. The court will go down the list of relationships in order (spouse, children, parents, etc.), and transfer the property to the heir or heirs as the state directs.
Relatives and friends often approach the court of people who die intestate, hoping to prevail upon the probate court’s discretion. State rules may allow the court to deviate from the order of succession on rare occasions when evidence demonstrates that property should pass to a specific person.
In the unlikely event that the probate court finds no one to qualify as a beneficiary, then the property escheats to the state.
Key to the Common Deeds
A number of common documents exist to convey the real property of a deceased person.
Before distribution, title to the decedent’s real estate is vested in the executor, under the oversight of the probate court. During this stage, beneficiaries may not sell the property, as they do not yet hold a legal interest in the property. If the executor, finding it in the best interest of the estate to transfer title to the beneficiaries, they will then be able to sell it.
An Executor’s Deed is the common instrument for to conveying property to them. The following information should usually appear on this deed (check state law):
- A statement that the named executor is conveying the property for the named person who wrote the will;
- A statement that the deed is executed pursuant to the will;
- A statement that the will has been probated;
- The property’s legal description.
If conveying the property to an outside party, the heirs as well as the executor should sign the deed, affirming the legitimacy of the conveyance. State law typically directs the executor to have the deed witnessed, notarized, and recorded with the county in which the property is located.
When a person dies intestate, the probate court appoints an administrator. The Administrator’s Deed conveys ownership of property held by the deceased. After a court-ordered sale of the property, when the court so authorizes:
- Use the Administrator’s Deed, following the judge’s order.
- Where state law requires, file an administrator’s report of the sale so that the court may issue an order confirming the sale.
- Pay out the proceeds as the court order directs: to the creditors, heirs, or into the court.
Deed of Distribution
Sometimes a valid will bequeaths real property to more than one person. This scenario is not uncommon, and there is a legal mechanism to handle it: the deed of distribution. This deed names the new owners and their respective interests.
If the decedent’s interest is bequeathed to the children, yet another co-owner survives the deceased, the surviving co-owner will continue to hold title to that partial interest, if no separate document indicates otherwise. Thus, a marriage partner may hold title along with the deceased co-owner’s children.
Among multiple new owners, each holds an interest in a portion of the property. No one may sell the lot without every co-owner’s consent. Co-owners may agree to sell their interests in the lot to one single owner among them. Alternatively, they may agree to sell the lot to an interested buyer and divide the proceeds.
Affidavit of Death
The recording information on a transfer on death deed identifies the intended beneficiary. Certain states allow transfer on death deeds for real estate. In California, for example, the process is:
- Complete an Affidavit of Death form to transfer title to the beneficiary. Have a notary witness the signature.
- Record a certified copy of the death certificate and the affidavit in the property’s county.
- Submit a preliminary change of ownership report.
- Follow through with all fees, inheritance taxes, and other taxes.
Any debts and agreements on the property follow it to the beneficiaries in a transfer on death, which contains no warranty to protect beneficiaries from claims against the lot.
Note: Beneficiaries can opt out of real estate conveyances by refusing a deed.
Good planning during a person’s lifetime ensures a smooth probate process after death. The process takes time, but conveyances will happen as the deceased person intended, with new deeds duly recorded to reflect the new ownership.