By Mauri Hawkins
Body Copy: It is difficult to admit it, but we are all getting older – day by day. For many of us, and for our family members, we must actively think about how we may want to distribute our assets when we pass away. Our assets may include personal property, financial accounts, investments such as stocks and bonds, and real property – just to name a few. For this article we will concentrate our discussion on real property.
Unless there is a legal tool established to have an asset avoid probate, typically when a person holds title to real property and passes away, their interest may be addressed through a probate of that person’s estate. From formal, informal, summary administration, or ancillary administration of a person’s estate, a review of the written wishes of the decedent’s distribution of assets or through the intestate succession laws of the state will identify the heirs and beneficiaries and how to correctly distribute any real property.
As an example, in Florida, under Chapter 5 of The Uniform Title Standards, Estates of Decedents, Standard 5.1 discusses an intestate decedent and homestead property. Here is one comment from that standard:
Section 732.101(2), Fla. Stat. provides that the decedent’s death is the event that
vests the heirs’ right to the decedent’s intestate property. However, for title to be
marketable, Florida probate or similar judicial proceedings are necessary to
establish the identity of the heirs. In addition, in order to preserve a permanent
record of the probate proceedings for future marketability purposes, it is strongly
recommended that certified copies of the pertinent excerpts be recorded in the
official records of the county where the real property is located. …
Under §§ 733.607(1) and 733.608, Fla. Stat., the decedent’s real property, except
protected homestead, is subject to the possession and control of the personal
representative for such purposes as the payment of devises, estate and inheritance
taxes, claims, charges, and expenses of the administration and obligations of the
decedent’s estate.
Protected homestead does not become an asset within the possession and control of the personal representative. Spitzer v. Branning, 135 Fla. 49, 184 So. 770 (Fla.
1938); Public Health Trust of Dade County v. Lopez, 531 So. 2d 946 (Fla. 1988).
Therefore, during the administration of the estate, a conveyance from the heirs
would not create a marketable title unless: (1) a final order determining the
property to be protected homestead had been entered, or (2) the personal
representative relinquishes control, or potential control over the asset by quitclaim
deed, certificate of distribution or other similar instrument, and estate taxes cleared.
So, in Florida, beyond just being the decedent’s asset, there is also an evaluation of whether the real property was their homestead property. Such a determination matters and may necessitate different steps for the distribution of the real property.
For a person that has a will (i.e. testate) which is duly admitted to probate and does not specifically identify the property as one to be devised, then the distribution of the real property most likely will have to be addressed through the probate court to determine the rightful heirs or beneficiaries of that property.
It is also worth mentioning that depending on your state, there may be other statutory mechanisms to assist with the distribution of real property without probate proceedings, when done properly, such as an Affidavit of Heirship, Life Estate / Beneficiary deed, Trusts, Survivorship deed, and others.
From a claim’s perspective, the team typically addresses heir and beneficiary issues that involve someone who was not identified in the probate proceedings, the person was not named in the nonjudicial evidence of an Affidavit of Heirship, or the person was named but a conveyance deed was not obtained and recorded.
To avoid missing an heir or beneficiary, it is important to review an obituary (if available), ask questions about the decedent’s family, and if heirs or beneficiaries are identified, obtain a deed from each person. To expand on the last-mentioned situation, we occasionally see that a decedent’s heir or beneficiary is also deceased. However, you cannot ignore their particular interest as their interest goes to this person’s heirs and beneficiaries and deeds still need to be obtained to resolve their interest.
Here are a few scenarios involving a decedent’s property:
Scenario #1
Q: A family member of an intestate decedent who passed away a year ago enters your office and says that he has a Power of Attorney to manage and sell the property. Will the Power of Attorney work in this situation?
A: No. A power of attorney automatically terminates upon the death of the principal. Thus, a probate must be open to determinate the heirs and the distribution of the asset.
Scenario #2
Q: The daughter of an intestate decedent visits your office. She states she is the only child that her single father acknowledged at the time of his passing. However, her two brothers have been “disowned by the family” and there is no need to probate her father’s estate. Is the daughter able to convey full fee simple title without her brothers?
A: No. To address any interest in the asset a probate proceeding should be open in that state or non-judicial evidence of heirship provided, if available in your state. In either case, it would be necessary to have all decedent’s heirs execute a conveyance deed.
Scenario #3
Q: The nonresident decedent owns real property in Florida. A probate of the decedent’s estate was handled in Nevada. A son comes to your office with the Nevada probate proceedings and states that he can sell the property. Can you proceed with only a Nevada probate?
A: No. Nevada does not have jurisdiction over the Florida property. A probate should be filed in Florida to address the distribution of the asset and a conveyance deed obtained from the heir(s).
Conclusion
This article provides a broad, high-level discussion of a limited area of estate and probate as it applies to real property. As you can see, the complexities of estate administration for each state must be analyzed thoroughly and accurately to ensure that the proper parties are conveying title and to prevent ownership challenges. Remember to check your state resources, speak with your underwriter, or discuss with your legal counsel to properly identify and resolve any interest being held by an heir or beneficiary.
Resources:
Justia. 2024 Colorado Revised Statutes, Title 15 – Probate, Trusts, and Fiduciaries, Colorado Probate Code, Article 11 – Intestate Succession and Wills – https://law.justia.com/codes/colorado/title-15/colorado-probate-code/article-11/.
Justia. 2023 North Carolina General Statutes, Chapter 28A – Administration of Decedents’ Estates; Chapter 28B – Estates of Absentees in Military Service; Chapter 28C – Estates of Missing Persons; Chapter 29 – Intestate Succession; Chapter 30 – Surviving Spouses; Chapter 31 – Wills – https://law.justia.com/codes/north-carolina/2023/.
Justia. 2024 Texas Statutes, Estates Code, Title 2 – Estates of Decedents; Durable Powers of Attorney, Subtitle E – Intestate Succession, Chapter 203 – Nonjudicial Evidence of Heirship – https://law.justia.com/codes/texas/estates-code/title-2/subtitle-e/chapter-203/.
Missouri Revisor of Statutes, Title XXXI Trusts and Estates of Decedents and Persons Under Disability, Chapter 461 Nonprobate Transfers Law – https://revisor.mo.gov/main/OneChapter.aspx?chapter=461.
The Uniform Title Standards, A Publication of the Florida Bar Real Property, Probate & Trust Law Section – Chapter 5 – Estates of Decedents (September 2010) – https://www.rpptl.org/DrawCommittees.aspx?GroupCommitteeID=73.
This blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on this blog.
