As a trustee of the deceased&39;s trust or as a personal representative or executor of the probate estate of the deceased, you may be required to sell the real estate of the deceased. In doing so, you will face legal problems and requirements as well as practical problems. I will address both in this article.
If the deceased or their trust owned real estate at the time of death, you, as a personal representative or trustee, have an obligation first to protect and preserve the property. If a person resides on the property, you must determine if that person has the right to be there. Otherwise, you have the obligation to act in the best interests of the beneficiaries. This may mean taking legal action for expulsion or using another legal means to take possession of the property. You are also responsible for ensuring that the property is properly insured. The death of the deceased must be reported to the insurance company or its agent, as the vacancy of the property may affect the terms of coverage. Once these issues are resolved, you can focus on the disposition of the property. The process of selling a property differs depending on whether the property is held in trust or as part of a probate estate, but many of the fundamentals will be the same for both.
Disposition of the property.
The manner in which you will manage this assignment of real property is determined by the terms and provisions of the will or trust you administer. A variety of these types of provisions are contained in wills and trusts. Here are some of the most common examples:
1. Sell the property and distribute the product.
From time to time, the deceased will order the trustee / personal representative / executor ("administrator") to sell the property and distribute the proceeds among certain beneficiaries. In this situation, the administrator would have authority and would be responsible for the sale of the property. This includes preparing the property for sale, marketing the property (with or without a real estate broker), negotiating the contract and closing the transaction.
Upon completion of the sale, the Administrator will distribute the net proceeds to the beneficiaries (after deducting marketing and sales expenses, including closing costs, taxes and other fees) in accordance with the terms of the will or the trust.
2. Transfer the property directly to one or more beneficiaries.
The first step is to determine the title of the property. I have represented trustees who believe that a parcel of real estate bore the title of the trust that he administered. When we searched for the title, we discovered that the deceased had never transferred ownership of the property of his own name to that of the trust. As a result, the property was part of the estate of probate of the deceased.
Sell the property of a deceased.
The sale of probate property or other property of a deceased poses its own problems. In many cases, the success of a sale depends on the timely closing. It is important that the personal representative has the power to sell the property as soon as possible. If the will contains power of sale, the personal representative is authorized to sell the property as soon as it is designated by the court. If the deceased dies intestate or executes a will without power of sale, a personal representative may sell a real estate only with the authorization or confirmation of the court. No marketable security will pass until the sale is authorized or confirmed by the court. In any case, the proceeds of the sale may be distributed to the beneficiaries only after full payment of all debts of the deceased.
The most important document in any real estate transaction is the contract of sale and purchase. This is the plan of the transaction. All items that you have negotiated with the buyer must be included in the contract. For this reason, it is extremely important that the contract be written in such a way as to clearly express the full intent of the buyer and seller. If a point you have negotiated is excluded from the contract, it is likely that you will not be able to enforce it.
Real estate transactions in most states are subject to the Fraud Status, which means that all agreements for the sale of real estate must be in writing. The writing does not have to be a formal contract. There are many cases where letters, notes, memos and other writings have formed a binding contract. However, to fully understand your intent and that of the seller, it is best to define the contract in a single well-prepared contract.