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
(1) Supporting the joists of a floor with small pieces of wood. (2) Providing temporary financing such as a short-term loan, to a real estate developer before long-term financing can be ...
Methods of owning real estate. Ownership form has important consequences for income tax, estate tax, corporate income tax, and survivorship. Real estate may be owned by one or more persons. ...
A rental stipulation a varying rental rate. Rental rate are determined tied to periodic appraisals or an inflation or an inflation index. The provision is more common in a long-term leases. ...
One to whom a gift or bequest is made. ...
Income for investors arising from net long-term profits of a real estate mutual fund realized when the portfolio is sold at a gain. Fund managers pass on profits from sales of real estate ...
A mortgage where the payments are overdue and open to a foreclosure action at any time. A mortgage not having a prepayment clause permitting the mortgagor to repay the mortgage at any ...
Having two families live in a residence designed for only one family. This violates single-family residence zoning. ...
The operating expenses definition is the sum of costs or expenses a company deals to operate as a business. The term operating expenses is used in any business field and is commonly ...
The proprietary lease definition is the binding occupancy agreement between the cooperative corporation and the shareholder to possess a rental unit in a building using cooperative ...
Have a question or comment?
We're here to help.