Definition of "Probate"
Simply put, probate is a legal proceeding whereby the will of a deceased is tested for validity.
The definition of probate is not known to most Americans. According to a Gallup survey, almost 60% of Americans did not have a will in 2016. The situation didn’t change much in 2017 when only 42% of Americans said they had a form of estate planning like a will or a living trust. To die without a will means to die intestate. There are intestacy laws in every state which dictate how your estate is dealt with after your death.
When no will is left, the estate is identified and distributed during a probate process. This process is overseen by a probate court. An estate administrator will have to identify the heirs, which is not always easy. The next step is to cover the liabilities and eventually, share the remaining estate between the heirs of the deceased. Most of the times, during probate, properties have to be sold to cover a debt. Real estate sales during probate have a special procedure and might turn out to be a bargain for house flippers, but such purchases are riskier.
According to the definition of probate, if a person dies with a will, this legal process is the only way to prove its validity. The only way to avoid this process is to establish a living trust. However, probate is not a calamity and parts of one’s estate don’t even go through it. For example, life insurance or retirement plan proceeds pass directly to the beneficiary you chose. The same happens to bank and brokerage accounts held jointly with right of survivorship.
A property belonging to a deceased cannot be sold before probate. It can only be sold during probate, by the executor, who usually goes the traditional route up to a point, then turns into a real estate auction, if more buyers turn up. Selling a real estate property after estate administration had completed could be extremely difficult, especially if there are more beneficiaries who have to agree on the transaction price. However, there are probate attorneys who can handle any situation. After all, probate is supposed to make life easier for those who remain behind.
Popular Real Estate Terms
Obligation taken on by a person who did not obtain it originally, but agrees to honor the terms of the existing obligation as a condition for the transaction. By assuming the loan rather ...
An asset. The term cost is often used when referring to the valuation of acquired property. When it is used in this sense, a cost is an asset. Concepts of cost and expense are often ...
An adjustment to the internal rate of return (IRR) computation so as to improve this measure. This uses a risk-free after-tax rate and a customary rate for money reinvestment. ...
Literature, samples, equipment, tools, and other useful information that real estate brokers or agents can use for demonstration purposes to prospective buyers. ...
In general terms, a licensee means a person or legal entity who has received authorization or permission to perform a particular activity through another party (the licensor in our case.) ...
Legal document that conveys real estate to the lender after the borrower defaults on his or her mortgage payments. The borrower should demand cancellation of the unpaid balance and a ...
The accelerated depreciation definition is a type of depreciation that makes it possible for a homeowner or real estate investor to depreciate their property faster than the straight-line ...
Concept used in valuing real property that conditions may be altered requiring a revised estimate of market value. These conditions include a shift in the demand/supply relationship, ...
Combination of two or more real estate brokerages into one, with only one company retaining its identity. Typically, the larger of the two companies is the company whose identity is ...
Have a question or comment?
We're here to help.