Navigating the Probate Process

We understand that the probate process can be a confusing and overwhelming experience. If you’ve been appointed the Personal Representative for the estate, you may feel like it is an enormous undertaking to do all the things required to settle the estate, all while in the midst of going through a very emotional time for everyone involved. We’ve put together this article for you to use as an informative resource for simplifying the probate process in Kentucky. Hopefully it will answer any questions you have about probate and how to go about selling a house in probate.

What is a Probate?

Probate, in this context, is the process of settling and administrating an estate. When someone passes away, the Court will oversee the process of winding up the financial matters of the decedent, collecting assets, paying debts, and distributing the remaining assets according to the will, or according to the law if there is no will. If there is a will, it usually names the person responsible for administrating the estate (called the Executor or Executrix). If a will cannot be located, the court will appoint this person (called the Administrator or Administratrix). Both of these terms are also referred to as the Personal Representative. This process is usually done with the assistance of an attorney since they know the ins and outs of the legal requirements, but sometimes it is done without an attorney in simpler cases that aren’t overly complex.

Because probate can be long, costly, and full of headaches, there are ways to avoid it through estate planning with the help of a professional. Real estate, specifically, can be moved into a trust or become jointly-owned. However, this must be done while the owner is still living. And to avoid probate altogether, all of the assets (vehicles, bank accounts, etc.) must be addressed in the estate planning process. This can be very beneficial and spare your loved ones the stress and expense of probate.

Probate in Kentucky simplified

Put very simply, we can break the probate process into six main steps:

1. Someone Dies
2. Probate is opened
   • If there is a will, a petition is filed with the court for permission to admit the will to probate, and appoint an executor or executrix to administer and settle the estate.
   • If there is no will, a petition is filed with the court to appoint an an administrator or administratrix to handle the estate.
3. The assets are collected
   • The personal representative identifies and takes over the assets, including any real estate, and manages and protects those assets.
   • The personal representative files an inventory of the assets within 60 days of opening probate.
   • The assets are sold, if necessary to pay the debts or be distributed to the heirs.
4. The debts are paid
   • Once the assets are collected and liquidated if necessary, they are distributed to pay expenses, taxes, and debts.
5. The remaining assets are distributed
   • Once the creditors are paid, the remaining assets are distributed to the beneficiaries according to the will. If there is no will, the assets are distributed to the relatives as determined by the court.
6. Probate is closed
   • After the debts are paid and the remaining assets are distributed, the personal representative puts together the final settlement and files it with the court. This must take place at least six months after the personal representative is appointed, but it sometimes can take longer. If the estate remains open for more than two years, a periodic settlement must be filed with the court at that time, and each year thereafter until the final settlement is completed.

Case Study
In order to illustrate this process, let’s look at a simple case study as an example. Suppose that Jane passes away, and she has two children, Bill and Joe. Jane had a will that named Bill the executor and wished to distribute her assets evenly between Bill and Joe. Jane owned a home worth $130,000 but has a mortgage of $30,000. She didn’t have any cash assets, but had $5,000 in credit card debt and $15,000 in medical bills. Bill opens probate then decides to sell the house. The house is sold for $130,000 and the mortgage is paid off at the sale closing, leaving $100,000 in assets. The debt from credit cards and medical bills totals $20,000, so those can now be paid off. There is $80,000 remaining, so Bill and Joe each receive $40,000, less any expenses, and probate can now be closed.

Can a Property Be Sold While in Probate?

Yes, a house can be sold while the estate is in probate, and this is usually what happens. A common misconception is that a house (or any real estate owned by the estate) can’t be sold until the probate process is complete. However, oftentimes the house is sold while in probate (during step 3 above). For a lot of people, their house is their biggest asset and it either needs to be sold to pay the estate debts, or to be evenly distributed to the heirs.

What Does it Take to Sell a House in Kentucky While in Probate?

In order to sell a house in probate, the personal representative must have legal authority to do so. This is given either by authority granted in the will, or authority granted by the court. In cases where there is no will or the will doesn’t give authority to sell, there will sometimes need to be a 30 day waiting period after the court order before the sale closing, to ensure that the heirs do not object to the sale.

Once it is decided to sell the property, there are a few ways you can go about it. You may wish to hire a professional appraiser to give their opinion on the value of the property. You can sell it on your own (FSBO), list the property for sale with a trusted realtor who has experience with probate properties, or sell it directly to an investor. The method in which you decide to sell is going to be impacted by a lot of factors, like the condition of the property and how much time and energy you can dedicate to the selling process.

After listing it or getting offers directly, you’ll need to decide which offer is right for you. Evaluating your goals for the sale of a house is an important part of this step. Do you need a quick sale so that you can pay off the estate’s debts? Would you prefer to wait a bit longer and see if you can get more profit from the sale? Or is the property in disrepair and needs a special buyer who can handle a complete remodel? These are all things you’ll need to take into consideration when you decide when and how to sell the property.

If you’d like to accept an offer you’ve received, you will need to make sure you have authority to sell as explained above. Sometimes this authority comes before you get an offer, but other times the court can approve the sale after the offer is accepted. The paperwork can then be handed over to an attorney or title company, who will take care of the title work and make sure that all the legal documentation is completed. They will schedule the closing, give you instructions on who needs to sign the documentation, and make sure the funds are paid to the estate.

Are You Thinking About Selling a House in Probate to an Investor?

Selling a house to an investor can have its advantages, but it’s not the right fit for everyone. If the house is already in great shape, and there’s no problem paying the ongoing expenses and no need to expedite the sale, you may consider listing the property with a realtor or selling it For-Sale-By-Owner (FSBO). Below are some of the advantages that an investor-buyer can usually offer:

• Quick Sale – Investors often have the ability to make a fast purchase, which can be beneficial if you’re looking to sell your house quickly without waiting for a traditional buyer.
• Cash Offers – Investors commonly make cash offers, eliminating the need for mortgage approval or financing contingencies, which can speed up the closing process.
• As-Is Purchase – Investors typically buy properties in their current condition, sparing sellers the hassle and expense of making repairs or renovations before selling.
• Avoiding Listing Costs – Selling a house traditionally involves various costs, such as real estate agent commissions, closing costs, and staging expenses. Selling to an investor may eliminate or reduce these costs.
• Certainty of Sale – Traditional sales can fall through due to issues like financing problems or buyer’s remorse. Selling to an investor reduces this risk, providing more certainty that the sale will proceed.
• Flexible Terms – Investors may offer flexible terms, such as allowing the seller to rent back the property for a period after the sale or offering seller financing options.
• No Need for Marketing – Selling to an investor often means bypassing the need for extensive marketing efforts, open houses, and showings, saving time and effort for the seller.
• Opportunity for Distressed Properties -Investors often specialize in buying distressed properties, providing a solution for sellers who have properties in need of significant repairs or facing other challenges.
• Privacy – Some sellers prefer to keep the sale of their property private, and working with an investor can provide a more discreet option compared to listing the property publicly.

How Can I Find More Information About Selling to Cloverleaf Homes?

Are you interested in getting an offer like this for a house in probate? Fill out the form below or give us a call at (859) 568-5135 today. Cloverleaf Homes is a direct house buying company that has built our reputation on buying houses for cash with less stress and less fees. We buy homes in any condition, so contact us today and get a competitive cash offer for any property that the estate owns. Or if you are just curious and have some questions for us, we would love to help any way we can. Feel free to give us a call!

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