By Attorney Nicholas Thalheimer, Esq.
Oftentimes when there is a sale of property the seller happens to be an “Estate”, essentially this means that the owner of the property has passed away and an Estate has been opened in the applicable Probate Court.
So, what happens now? The process of opening an Estate involves several steps that must occur before a Personal Representative is appointed and empowered to make a conveyance of estate property. Additionally, even after appointment there are still strict rules that must be followed for a Personal Representative to make a valid conveyance. Every estate opened with either have a will (testate) or not have a will (intestate), either way both will have certain issues that come up.
If an individual passes away without a will the decedent will be considered to have passed away intestate and testate if there was a will. One very big issue in the context of an intestate estate is that there is no will, and if there is no will there is no power to sell in the will, so before a Personal Representative can affect a conveyance of property they would need to obtain a license to sell from the probate court which can take several weeks. Its also not simply enough to have a will to avoid this issue, a will must contain specific language before a Personal Representative is considered to have been granted a power of sale in a will. All too often a poorly drafted will or a “do-it-yourself will” will not have a sufficient power of sale in it, if it has one at all.
Additionally, the Personal Representative is a Fiduciary of the Estate and has a responsibility to the heir/devises of the Decedent and owes them a duty to handle the affairs of the estate property. One very common error are deeds from an estate for nominal consideration (1.00) basically a Personal Representative cannot “gift” property or give it away as it is presumed that a conveyance for nominal consideration is a gift and would likely be considered “a breach of their fiduciary duty” in the same way that a deed executed pursuant to a power of attorney for nominal consideration. The statutes indicate that a Fiduciary Deed must be “for value”.
Another common issue is the time at which a devisee has the power to convey after having taken title through a probate. Basically, an estate has to be “closed” pursuant to the court allowing a “petition for complete settlement and distribution”, at that point the estate property has passed to the heir or devisees as may be the case. Generally, an estate cannot be closed for at least a year as that is the statutory time given for any potential claims against the estate to be filed. Its not infrequent that a Complete Order of Settlement and Distribution is never filed. Under that set of facts it is presumed that after 6 years an heir/devisee has the power to convey from an estate that was never formerly closed as the statutory time in which a Fiduciary has to petition the court to sell estate property for “costs or expenses of administration” will have passed.
Naturally, the conveyance from an estate is ripe with the possibility for errors for the inexperienced conveyancer and its very important to have an experienced conveyancing attorney involved with your transaction as these issues can be spotted early on and resolved as quickly as possible.
As always please contact this office for more information.