What do you do if you inherit a home in the SF Bay area that is not titled in the name of a trust? By now, you are most likely aware that in order to transfer the title of the home's deed, the property will have to go through probate.
With real estate values at their current value, inheriting a property of any kind in the bay area is nothing to balk at. Whether the home is worth$200,000 or $2 million, you'll need to get it re-titled in your own name if it is not contained in a trust. That means going through probate. The probate process frequently gets a bad rap, but in truth it can be a fairly smooth, uncomplicated process when heirs and beneficiaries are on the same page. In addition to consulting with a local attorney to initiate the probate, there are some practical things you'll need to consider as well. Here are five important things to think about if you've inherited Bay area property:
1. What is the Probate Policy of the County the Property is located in?
Once you've determined what county the home is located in, you'll need to find an attorney who specializes in probate in that county. This is important. A probate attorney who frequently goes to court in the county your property is located is in the best position to assist you. All county probate courts are not alike. After all, they are made up of people, and people have differences and preferences. An attorney familiar with your specific county will ensure your probate is completed as swiftly as possible, and can best guide you should any complications arise during the probate. For example, my office specializes in probates and contested probates in Alameda and Contra Costa County.
A good probate attorney will also take the time to answer your questions, walk you through the probate process, and be available to answer your questions along the way.
If you anticipate any objections or differences of opinion in regards to who will inherit the home, or become administrator of the estate, it is especially important to hire a probate attorney that also has significant probate litigation experience.
2. What expenses are associated with the home?
Does the home have a mortgage that needs to be paid? Or homeowner's association fees? What are the upkeep costs - utilities, gardening, taxes, insurance, etc? Keep records and receipts of any expenses you incur on behalf of the property - they could be relevant in the probate process.
3. What should I do with the house?
You have three options for your newly inherited property: keep it for your personal use, rent it, or sell it. If you have siblings or other persons who stand to inherit part of the property, get together and discuss what option best suits everyone. Consider making a list of pros and cons for each option. One thing to keep in mind is that if you decide to keep the home, the costs of probate will have to be paid by you, the beneficiaries, or other funds from the estate.
Communication among family members is key when it comes to inheritance - especially if there is no will to dictate who gets what.
Lack of Communication = likelihood of litigation = more money spent
4. What is the Property Worth?
Knowing the value of your property may help you decide what to do with it. Consult with several realtors who have sold homes in the nearby area to get estimates on the property's value. If you think you may end up deciding to sell, find realtors who have experience selling homes in the probate process. The sale of a home in probate is more complex than a regular sale, and a realtor equip to deal with that is your best bet for a smooth and successful sale. A knowledgeable probate attorney will be able to offer a few names.
If you are not the only one who stands to inherit the property, you'll need a certified appraisal as well, even if you decide not to sell the home. The certified appraisal generally costs a few hundred dollars, and is one of the requirements set forth by the probate court.
5. At what point in the probate can you sell a property?
The majority of inherited homes are sold. Either beneficiaries and heirs do not live in the area, or they already have their own home and do not wish to move. In addition, the expenses of maintaining a home can begin to add up. Most heirs and beneficiaries also elect not to deal with the hassle of renting out a home, unless there is very little liquidity to be gained from sale.
Once an executor (if there is a will) or administrator (no will) is appointed by the probate court, that person is given either full or limited authority to sell the assets of the estate. For the purposes of real estate, this typically means they have the legal right to sell property. Sometimes, the sale of the property will be subject to court approval, but most often it is not.
Regardless, any property belonging to an estate which is going through the probate process can generally be sold once a personal representative (executor or administrator) has been appointed by the court. If there is more than one person who wishes to be the personal representative, or any question of who is legally entitled to do so, consult with a probate attorney as soon as possible.
Most Common Mistake when Inheriting large Assets
Because of the stress and grieving that accompany the loss of a loved one, resolving an estate can be an emotional and overwhelming process. This is one of the reasons that family members elect to hire an attorney to assist with the process, even when distribution is straightforward. The probate process can be long and complicated, just like selling a piece of property and paying the estate taxes. A solid probate attorney, knowledgeable real estate agent, and estate accountant can go a long way in relieving the burden and stress of settling an estate.
Choose professionals who you trust and feel comfortable with. Don't be afraid to interview several choices before making a decision.
If you have questions about the Probate process in Contra Costa or Alameda County, feel free to call my office for your free consultation: 925-322-1763