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
The time period a real estate investment is held. The return is tied to the time period of the investment. The period is used for income tax purpose to determine whether a profit earned or ...
The term market segmentation is mostly used in marketing for assembling prospective buyers in groups based on their needs and their response to a marketing action. One definition of market ...
Premiums in insurance and real estate define as a bonus or surplus money. A dividend means a periodic fee you have to pay for your insurance protection. While in real estate, a premium ...
Exposed heating unit located within a room that transfers heat generated by hot water or stream through conduction. The surrounding air circulates around the radiator using convection ...
The floor of a building closets to the building grade. Normally, the ground floor of a building is the first floor. A ground floor can sometimes be located between the first floor and the ...
An inlaid stone or wood flooring arranged in tightly fitting geometrical patterns. It is decorative and often more than one color. ...
Issued to correct errors in another deed such as spelling errors in a name or an improper legal description. For example, a correction deed was issued to the property owner Smith to amend ...
Real estate held for productive use or investment. Land is recorded at the acquisition price plus incidental costs including real estate commissions attorney's fees, escrow fees, title, ...
Form of financing that replaces or "takes-out" a construction loan to a developer. The take-out loan is a permanent mortgage loan which replaces the construction loan when, commonly, the ...
Have a question or comment?
We're here to help.