How will you be affected by probate?
You’ve probably heard the term probate. But it is not always understood. What is probate and how do you get through it?
To find out about this topic, I decided to interview Michael Haag from Haag Law Offices in Minneapolis.
After someone passes away, their belongings need to be legally distributed to their heirs. If the deceased person’s estate is worth less than $50,000 then this distribution can be done through a simple reading of the will. However if someone owns a house, then they are likely above that monetary threshold. Also if someone passes intestate (without a valid will) then their estate will also need to go through probate.
The probate process is overseen by a judge at the county court and it is administered by a personal representative (PR). This process was setup so that a person’s belongings can be distributed in an orderly and legal manner.
Once the personal representative is recognized by the court they can begin to sell the estate’s assets including any real estate. The proceeds from the sale will be placed into an account and can’t be distributed to the heirs of the estate until the estate’s creditors have been paid, bills have been settled and the probate case is closed.
The personal representative has some choices to make regarding the real estate. Does it make more sense to sell the property as-is, or should it be cleaned up and repaired in order to get top-dollar in today’s market? Each situation will be different depending on the property’s current condition and the estate’s liquid funds available to make repairs or improvements. If the decision is to fix the property before selling, then the estate should also have funds to continue paying for utilities, taxes, insurance and maintenance until the closing is complete.
The timing in the market is also important to consider. While people do buy real estate throughout the year, sales prices generally improve during the summer months.
Once the PR files the probate application, the basic information about the case becomes public record. The PR should expect to receive advertisements from various real estate agents, and investors who are interested in providing their services. It may seem odd that their loved one’s passing was what prompted this solicitation, but the majority of people who reach out are in business to help people.
A real estate professional can be a great help, as most people are not in the business of selling property. It’s best to work with someone who is familiar with the local market values and can provide options based on the specific circumstances.
If a real estate agent is chosen to market the property, they will work closely with the law firm representing the estate to make sure the purchase agreement is written correctly. The attorney will then work with the closing company to make sure that the title to the property is cleanly transferred to the buyer. It truly is a team effort in these situations.
In the state of MN there are ways to avoid going through the probate process if plans are made before you pass away. Haag Law Offices counsels their clients through these decisions. In some cases it makes sense to sign a Transfer On Death Deed. With this document, the heirs of the estate can transfer title of the house by presenting a death certificate and an affidavit. For others, it might make sense to create a trust and place your assets into it before you pass.
If you would like to discuss your specific legal situation please contact Michael Haag through his website www.haag-law.com or call 612-255-5182.
To get a free market analysis of your property, please contact
John Stiles, Bridge Realty at 612-554-7794 or click here.