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
Measure of the value of all goods and services produced by the economy within its boundaries and is the nation's broadest gauge of economic health. GDA is often a measure of the state of ...
Same as term contract for deed: Method of selling and financing property whereby the buyer obtains possession, but the seller retains the title. ...
A legally transferable debt instrument by which the issuer agrees to pay the payee within a certain time period. Note usually pay a specified rate of interest tied to the market rate of ...
Literature, samples, equipment, tools, and other useful information that real estate brokers or agents can use for demonstration purposes to prospective buyers. ...
Style of the 19th century resembling an old church. It has a tile roof, arch-shape windows, stucco walls, and pyramid roof. ...
Lease that incorporates increases in agreed-on payments over the term of the lease contract. For example, a particular step-up lease may require that the lessee pay a 10% increase each year ...
Situation in which pledged property is held by a person or entity until the loan is paid. ...
Foreclosure sale enable in those states permitting the use of a power of sale clause to be inserted into a mortgage or deed of trust empowering the mortgagee to advertise and sell a ...
Interest deductible for taxes paid by the taxpayer. It is an itemized deduction on Form (individuals) or Form 1040 (individuals) or Form 1120 (corporations). An example is interest paid on ...
Have a question or comment?
We're here to help.