Paul’s mother passed away recently and the will stipulates that he will inherit his mom’s house.  This is great news for Paul as he is in need of money, so he immediately puts the house up for sale and quickly finds a buyer.  Everything goes smoothly until it’s time to close on the property and the title search shows a cloud (a lien or claim against the house).

Why was there an encumbrance?  The reason is that in order for Paul to sell the house, the house and all other assets must pass through probate before it is devised and Paul gets put on title, becoming the official owner.  Not only can he not sell the house, but it could cost him a lot of money and jail time! Here’s how,a contract between a homeowner and a broker says that if the broker brings a buyer who is willing, able and financible, the broker is due a commission. That alone could cost Paul thousands of dollars.

Thatis not the worst of Paul’s situation however.  He can be sued for fraud, and that is a crime.  Paul does not own the home, so he may not try and sell it.

Selling the house is possible but getting money out of the estatebefore it’s probated is unlikely.  If Paul was the Executor of the Estate, he would be able to get a release from the court in order tosell the house.  In this situation though, the money recieved from the sale would go back into the estate until the estate has been settled.  Only at that time, can the money be distributed to the beneficiaries.

The one chance Paul would have is if the estate’s assets total value was smaller then $20,000.  In New Jersey probate,estate’s valuing less then $20,000 are not required to pass through probate. After the required procedures are followed and the heir has transferred title to himself/herself, the property can be sold.  This however is highly unlikely in New Jersey probate as having a house in an estate will surely have the value of the estate well over $20,000.

Insummary, the executor can sell a house out of theestate by getting the courts consent.  This is a good idea if you arein need of money to pay off the decedent’s outstanding taxes or liens.

Sometimes money is needed fast, if you need to sell quickly visit ScottyBuys.com.

Technorati Tags: , ,

What is Probate?

What is Probate?

Probate is the legal process by which decedent’s estate is transferred to his/her heirs or beneficiaries.  If the deceased person created a will, then the person is said to have died testate.  When this is the case the probate court determines the validity of the Will.  There may have been multiple Wills created (for various reasons) and the courts job is to determine which is the legal one to use according to law.  The court will also hear any objections to the Will, makes sure the creditors are paid and assures that the property remaining is distributed according to the terms and conditions of the will.

The Will names the person (or sometimes the institution) that will carry out the wishes of the deceased.  This person is call the Executor.  The executor is in charge of the probate process and is accountable to the beneficiaries and must perform their duties in a legal and fair manner.  It is possible for the court to appoint a new administrator if it feels the executor is not capable.  The Executor or administrator is entitled to a fee or commission for doing the work.

A person who dies intestate, has passed on without leaving a will.  In this case the court will appoint an administrator to handle the estate.  The administrator will then distribute the estate according to state law.  This, however only happens once all debts, taxes and administration costs have been paid.

In the state of New Jersey all probate cases go through the county’s, in which the decedent died, Surrogate court.  The Surrogate court will distribute the required legal documents called either Letters of Testamentary for an executor or Letters of Administration for the administrator.

New Jersey Probate is the number one place for finding out about probate and estate planning.  Feel free to read all the articles on this site for free.

Technorati Tags:

Tagged with: