Thursday, May 19, 2016

Deceased Seller Title Issues

Selling a property when a vested owner is deceased and no probate will be opened requires additional information be collected in order for a title company to insure the sale.

A Lack of Probate Affidavit is the first item a title company will require. This is usually completed by the surviving spouse, children, or parents of the deceased party, depending on the situation. This provides the title company with the information that is typically addressed and submitted in court had a probate been opened.

The affidavit asks for the following: 
1) A list of the heirs. This is in part so the title company has an idea of who and how many there may be that would be required to execute on the forthcoming deed. 
2) An estimated value of the estate. This is to get a determination if any inheritance tax may be due and become a potential lien on the property. 
3) Confirmation of any state tax due. This can occur, for example, if the deceased received state assistance through Medicaid due to an illness or disability which could potentially become a lien on the property. 
4) A copy of the will, if there is one, to assist with identifying any heirs or specific devisees of the estate. 
5) A copy of the death certificate for evidence of death. 
ldeally this is dialogue the listing agent, heirs, and title company should have as early as possible in order to determine who would be required to execute the deed, or if a more viable option is to open probate. 
A non-probated estate provides some additional risk to the title company in the event an heir after the sale claims an interest in the property. This would be avoided when an estate is probated, since the court would then determlne who has authority to execute documents on behalf of the deceased party. This protects all of us from any post litigation and potential law suits.

Today's blog courtesy of Lauren Yost, Chicago Title

Happy Investing!

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