Selling Real Estate in the Middle of a Probate

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By Gary M. Landau, Esq.

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Selling Real Estate in Middle of Probate | Coral Springs, FL | Call (954) 979-6566

You might think that when a loved one passes away, you have to wait until the probate process is complete to sell their home, but you actually don’t. Florida law generally allows heirs to sell a home before the rest of the probate is finished.

Here are the steps involved:

The personal representative can hire a Realtor.  Once the personal representative (PR) has been named by the court, that person is legally entitled to sign a listing agreement with a Realtor.  Alternatively, if they don’t want to use a professional agent (typically not a good idea, in my opinion), they can put the property up for sale themselves.

The property should be professionally appraised. If there is more than one beneficiary, it is a good idea to have the property professionally appraised, so everyone feels comfortable that they will be getting a fair price. In some probates, the court must oversee the sale (see below). In those cases, the judge will want to see comparably priced homes provided by a Realtor or appraiser, to be sure the home is being sold at market value.

Once a buyer is found, the personal representative signs the contract. The PR is the legal representative for the sale, even if the proceeds will be split among other heirs. (If the property falls under Florida “homestead law,” all beneficiaries will need to sign the contract.)

Unlike with a traditional sale, though, once the contract is signed and the deposit tendered, in some cases, the deal is not yet complete.

The court verifies the deal. A person can stipulate in their will that the personal representative has the authority to sell the home. Although some judges still require their approval in those deals, typically the court does not need to get involved in these cases. However, if there is no stipulation, the PR, working with their attorney, submits paperwork to the court to get their okay to finalize the sale. All heirs must agree with the terms of the deal.

The proceeds are held temporarily. While the rest of the probate is ongoing, the proceeds from the sale of the property are held in escrow by the probate attorney through the creditors’ claims period (typically 90 days). Once that time has passed, the proceeds are distributed according to the will or Florida law. (Even if it’s during the 90 days, the buyer takes possession of the property with a clear title.)

Quick Frequently Asked Questions

1. Who is responsible for paying the mortgage, insurance, and property taxes while the home is for sale?
Under Florida Statute § 733.608, the Personal Representative has the legal duty to take possession of and maintain the decedent’s real estate (unless it is protected homestead). The estate is generally responsible for paying the mortgage, utilities, and property taxes during the administration period. Property taxes are classified as a Class 3 priority debt under Florida Statute § 733.707, meaning they must be paid from the estate’s liquid assets before most other creditor claims.

2. Can the Personal Representative purchase the home from the estate for themselves?
This is known as self-dealing and is generally prohibited under Florida Statute § 733.610. Because the Personal Representative has a fiduciary duty to the beneficiaries, they cannot purchase estate property unless the decedent’s Will specifically grants that power or the court approves the transaction after a hearing. Any sale involving a conflict of interest is voidable by an interested person unless they consented after full disclosure.

3. What happens if one heir or beneficiary refuses to agree to the sale of the property?
If the beneficiaries cannot reach a consensus, the Personal Representative or any heir can file a Petition for Partition under Florida Statute § 733.814. This legal action asks the court to “partition” the property. If the home cannot be physically divided (which is true for most residential houses), the judge will order a forced sale of the property and distribute the net proceeds among the beneficiaries according to their respective interests.

4. Are the proceeds from the sale of a “Protected Homestead” still subject to the decedent’s creditors?
Generally, no. In Florida, if the property is determined to be Protected Homestead by a court order, the home—and the proceeds from its sale—passes to the heirs free of the claims of the decedent’s general creditors. However, to maintain this protection for the cash proceeds, the heirs must demonstrate a “good faith intention” to reinvest those funds into a new Florida homestead within a reasonable time, and the funds should not be commingled with other non-exempt money.

5. Is an “Order Authorizing Sale” always required to pass a clean title to a buyer?
It depends on the language of the Will. Under Florida Statute § 733.613, if the Will contains a “Power of Sale” clause specifically authorizing the Personal Representative to sell real property, a court order is generally not required to transfer title. However, if the decedent died intestate (without a Will) or the Will is silent on the power to sell, the Personal Representative must obtain an Order Authorizing Sale from the probate judge before the closing can legally occur.

Having the Law Offices of Gary M. Landau by your side during each step in a real estate or probate matter helps insure that the process goes as smoothly as possible. For more information about your real estate or probate matter in South Florida, call 954-979-6566 or email for a free consultation.

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Frequently Asked Questions

A will is the simplest way to ensure that your funds, property and personal things will be distributed after your death the way you want them to. Even if you have very few assets, you will benefit from having a will. About half of all Americans die without a will (known in legal terminology as dying intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to state law. A will ensures that your assets will be given to family members or other beneficiaries you designate.

 

Having a will is doubly important if you have young children. One section of the will allows you to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children, who may not be the person you desire.

Many Florida residents have out-of-state wills, drawn up while they were still living among the hills of North Carolina or the hubbub of New York. If the will was valid according to your old state’s laws at the time you made it, it is still legal in Florida. However, if you are a Florida resident, you may benefit greatly by having a new will drawn up in Florida, because it will likely be more easily admitted to probate.

 

It is important to know that each state has its own requirements for what makes a will a legally binding document. For example, Florida doesn’t recognize handwritten wills that haven’t been witnessed (known as “holographic wills”), or oral wills not put into writing, even if other states okay them. There’s also the matter of Florida estate law. In this state, for example, your surviving spouse is entitled to 30 percent of your net probate estate, regardless of what you say in your will. The spouse may also have a “Homestead” interest in property you share here, even if you want your house to go to someone else. In fact, all real property owned in Florida will be subject to this state’s laws, even if you’re a snowbird maintaining a residence in the state where your will was drawn up. Other peculiarities also exist, which is why a Florida will could make things much easier for your heirs.

 

If you would like to have me review your current out-of-state will, I am happy to do so without charge. If it turns out to be in accordance with Florida state laws and procedures, you can continue to rely on it. If not, however, your heirs would rather you discover that now.

It is a good idea to re-read your will every few years to be sure it reflects up-to-date realities (you may not want to leave your heirloom to a niece you are no longer speaking to, nor have someone be named your child’s guardian if they have taken seriously ill since you drafted your will). It is especially important to reexamine your will if:

 

  • You have gotten married since it was last drafted;
  • You have made bequests to people who have fallen out of your favor or are no longer living (I recently updated the will of a man who had left everything to his first wife, who was long deceased), or you have not included people who are now dear to you;
  • You would like to change the person named as the personal representative of the estate. (Note: Florida law does not allow a nonresident of the state to serve in this position, unless it is an immediate family member or certain other relatives);
  • You have acquired pricey or sentimental items that are not accounted for in your will. Do note, though, that Florida law allows you to attach a separate personal property memorandum to your will, detailing who will get which specific items. This list can be changed whenever you want.

Perhaps I should answer this question with where not to store it: in a bank’s safety deposit box. Although it may seem logical to put this with your other important papers, it is often difficult for your heirs to gain access to the box once you die, since the box is sealed then and must be opened in the presence of a bank employee.

 

One good option is to leave your original will with the attorney who drafted it, making copies for your personal representative and other important relatives and letting them know who has the original. For my clients who prefer that I store their original will, I keep it in a fireproof will vault in my office, or in the vault in my bank.

 

As an alternative, you could store the will in a fireproof box or vault in your own home.

 

Wherever you store it, be sure to let your personal representative and other close relatives know where you have put it!

Probate is when the court oversees your assets and liabilities after your death. During probate, the court makes sure that your will is valid and acceptable; that all debts, bills, creditor’s claims, and taxes are paid from your estate’s assets; and that your remaining assets are distributed to your beneficiaries according to your will (or, if no will exists, by Florida law).

 

Probate usually does take longer than most beneficiaries would like. But in order to ensure that everyone with a right to a claim is included in the process, the court requires several steps. If the size and complexity of your estate are minimal, however, the entire process of probate can take as little as a few months. Larger estates that are subject to IRS estate taxes or those involving litigation on the part of creditors or heirs generally take longer, often one or more years.

 

To speed the process along for simple and small estates, the courts allow a shortened form of probate, known as “summary administration,” which requires much less paperwork and time.

A personal representative (PR) is a friend or relative, or an attorney or bank, who is put in charge of the estate until all matters regarding the probate are resolved. (In other states, this person is sometimes called an executor or administrator.) The job of the PR includes identifying all assets, searching for creditors and paying valid claims, filing required estate tax returns if the estate is large enough (the figure escalates over time, according to Congressional laws), coordinating with the probate court and attorneys, and overseeing the distribution of assets–all done under the guidance and assistance of a qualified attorney.

 

Serving as a PR is an important role, and such a person should be selected with care as to who is most willing and best able to serve in this position. By Florida law, your personal representative must be over 18 years of age, and be a blood relative, your spouse, the parent or child of your spouse, or a Florida resident.

Generally, no. If you co-own all property via such legal structures as “tenancy by the entirety” or by “joint tenancy with right of survivorship” the property immediately passed to you upon your spouse’s death. Proof of death is usually all that is needed to pass such jointly owned title for cars, stocks, and other personal property to the surviving spouse.

 

But if even one asset was held solely in the deceased person’s name, or any property is owned in the form of a “tenancy in common,” that estate will be required to go through probate. If the assets are limited, the shorter, simpler form of probate is generally all that is required.
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