A relative of yours has passed away, and they owned a house. You or someone you know has inherited that house
. However, you do not want the house. Now you need to sell a house in probate. What steps do you need to take to be able to sell the house that you’ve inherited?
Written by Derek Malcolm of Derek Malcolm Law.
In most states, there are two ways that property, including real estate, passes when someone dies.
First, someone can leave property to another person by setting up a Last Will and Testament. If someone leaves you real estate in their Will, then when that person dies, you inherit that real estate
and become the new owner. Second, if someone dies without a Last Will and Testament, then most states have laws that direct who gets the deceased person’s property, since they did not have a Will. In most cases, when this happens, the property is left to surviving spouses and/or children.
If someone leaves you real estate in their Will, then you become the owner of that real estate when the person dies.
However, before you can sell the property, you have to probate
. This is typically done in one of two ways. One way is to do a full probate of the deceased person’s estate and let the court approve the division of that person’s property through the appointment of an executor or personal representative.
The other, and easier, way is to do a shortened version of the probate where the Will is recorded in the Court Clerk’s Office solely for the purpose of transferring the real estate. In this case an executor is not appointed, and the court does not oversee the transfer of the property. Because the court does not formally involve itself in this process, it is usually less expensive and a little bit faster.
This is typically the preferred method when the house is the only piece of property that the deceased person owned, since things like clothes and furniture do not always have to be formally probated.
If someone dies without a Will, and you were that person’s spouse, child, grandchild, etc., then you may one of that person’s heirs.
A person can have multiple heirs. For example, in Tennessee, if a person dies and at the time of the death is married with two children, then that person would leave behind three heirs: their spouse and their two children. In that scenario, each heir would receive one-third of the deceased person’s estate, including any real estate property.
If you inherit property because you were someone’s heir, then you can also choose to probate the estate and have the court oversee the distribution of the deceased person’s property. And again, this might be necessary if the deceased person owned property other than real estate – for example, bank accounts, stocks, investment accounts, etc.
If not, and if the real estate is the only asset that you’ve inherited, then instead of probating, you can simply prepare and record a document called a List of Heirs or Affidavit of Heirship. This states that a person has died, and you were one of that person’s heirs. The List of Heirs or Affidavit of Heirship is recording with the county land records and provides the information necessary for you to sell the house in probate.
Regardless of whether the deceased person left property to you in a Will or simply left you as one of their heirs, there are a couple of other things to consider as part of the process of selling a house you inherited.
First, most states allow creditors of the deceased person a specific period of time to file claims against the deceased person’s estate/property. This prevents a creditor from not getting paid simply because that person has died.
If you sell a house that you inherited, you have to comply with these creditor’s claims laws. That may require you to wait until the creditor’s claim period has expired before closing on the sale of the house, or, alternatively, it may require that your money from the sale of the house be held in the closing attorney’s escrow account until the creditor’s claims period is over.
Second, some states have inheritance taxes
that are owed when a person dies. As part of the process, you need to ensure that the person who left you the real estate did not owe these inheritance taxes
. This usually just requires the filing of a document with the state to confirm that no inheritance taxes are owed.
Third, some states, including Tennessee, require you to confirm that the deceased person did not owe Medicaid any money for things like nursing home care before you can sell property that you’ve inherited. Again, this is usually accomplished by filing a document with the state and awaiting a formal reply.
Once these tasks are completed, you will be able to sell the house that you’ve inherited.
Although there are several steps between inheriting property and selling that property, the process is fairly straight-forward, and it can usually be completed in a relatively quick timeframe. If you are thinking of selling the house you’ve inherited, a commercial cash buyer/investor
can help with this process, as they can usually help you complete the probate process as part of the closing by integrating the legal process for both the probate and the closing all into one smooth transaction.
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