Texas Probate: Selling an estate with or without a Will
When a person inherits a property that they want to sell, it’s important to make sure all of the legal paperwork is handled properly before that listing ever hits the MLS. Here’s a brief explanation of Texas probate law. It’s not a complete picture, so please consult an attorney if you have questions.
When someone dies without a Will, the estate must be shared in accordance with rules determined by the State, known as the Texas Probate Code. If there is no joint tenancy with survivorship in the deed to the property, then before a house may be sold, a clear title and heirship must be determined. While that is in process, typically a family member will need to take over the maintenance of the property, including property taxes, insurance, utilities, lawn care, cleaning out the contents of the house, and any needed repairs to preserve the value of the property.
If a Will exists then it generally must be executed and probated in court before the house is sold. To do that, a probate hearing is held, wherein all of that person’s property is be gathered, their debts paid, and the remaining assets distributed according to either the provisions of his or her Will. This is assuming that there is no dispute over the validity of the Will or distribution of assets. This generally takes about 30 days.
When no will exists, an Affidavit of Heirship may be prepared. This involves providing a complete family tree to demonstrate who the rightful heirs are and their relationship to the deceased. It’s easiest if there haven’t been a lot of marriages, or the pool of decedents or other heirs is small.
After the Affidavit of Heirship is complete, an attorney may prepare a deed transferring title to the proper heirs. Both the Affidavit of Heirship and the new Warranty Deed are filed with the county in which the property is located. Only after those steps are complete may the heirs begin the process to sell the house. Again, this process is best handled by an attorney who specializes in probate law as the process may be lengthy if not handled properly. Understand that the sales contract must be approved by the court prior to closing. An experienced attorney can handle this though it may day take a little longer than a traditional closing.
Do bear in mind that in Texas, there are a number of different kinds of estate administration, depending on how the will (if present) was written and who the beneficiaries are. In any case, the title company makes the rules. If the title company insists that you take extra steps in order to remove an exception from the commitment, you do it. If they tell you to get all beneficiaries to sign the deed, you’re going to have to persuade them all to sign.
When you are presented with the opportunity to list the home of an estate, be sure to ask questions about the probate process right away. You don’t need all of the answers right away, but you need to know if the would-be sellers seem to have their ducks in a row. Do you have every signature that will be needed at the closing on the listing agreement?
Once you have the listing, make sure to advise buyers that a special provision will need to be made to subject the contract to the approval of probate court. Be prepared to present a certified copy of the appraisal to the court. Also be sure to advise the buyer that possession will be determined by the court as a confirmation of sale, and not upon the typical same day “closing and funding.”
Our best advice is to develop a good relationship with an attorney who practices probate law before you encounter this type of transaction so that you are prepared to do business when the time comes.