What happens when a home is left to a child or other relative of a deceased parent or uncle or aunt or grandparent? Who owns the house? Can the house be sold? Can the relative use it as their own?
These issues are always present. The primary part of the issue that most people do not understand is the issue of ownership. When an owner dies and there is a Last Will and Testament, just being named as the successor heir to the house does not transfer the title to the house. If the house is to be sold - who sells it? More specifically, who has the "legal capacity and authority" to sell the house?
#1 - You need someone legally authorized to sell a house and sign the deed of transfer to the buyer. Unless the house was in a trust and the trustee is alive, or the ownership of the house was in joint tenants or a life estate and there is a surviving joint tenant or remainderman, the estate of the decedent will have to be probated. The probate (also known as the administration of the estate) usually requires an attorney. In Florida the estate would need to go through formal or summary proceedings. Most legal proceedings should only cost a few thousand dollars. Without getting the property into a living person's name could result in problems down the road. It will have to be done eventually - no exceptions! The sooner the better.
#2 - Even to take a listing by a Realtor the listing has to be signed by a person authorized to sell the house. An heir is not an authorized person until the court has signed a Court Order making someone the owner or authorized person (this later person is usually the Executor or Personal Representative of the Estate). If an heir is signing a listing agreement it should be qualified (disclosed) that the authority of the person is subject to the court proceeding.
#3 - If there are ongoing expenses for the house, like a mortgage, taxes, association fees, service providers like lawn care, etc. - these all need to be serviced. Mortgages can be a problem. Upon transfer to the heir, the clause in most mortgages about prohibiting transfers could be activated as a "due on sale". The borrower, being deceased, is a trigger to the due on sale of the promissory note as well. If an heir is keeping the property they need to consider refinancing it to pay off the decedent's mortgage.
Every estate situation has some uniqueness to it when considering real estate owned by the decedent. Doing nothing is simply NOT an option. Be aware of pitfalls and move quickly to resolve them before they become a major headache.
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copywrite 2017 Richard P Zaresky Esq.
Richard Zaretsky is a Florida Board Certified Real Estate Attorney practicing in West Palm Beach since 1976. He is Senior Partner of Zaretsky Law Group, a law firm focusing on real estate and business law issues. Mr. Zaretsky has written dozens of articles on real estate and related law matters. They can be found at his Table of Contents.
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