Probate wills refer to decedents Last Will and Testaments which are held in probate. Unless a Will is contained within a living trust, it must be validated through the probate court. Probate is the process used to inventory assets, pay outstanding debts, and distribute assets to appropriate beneficiaries.
An original copy of probate wills, along with the decedent's death certificate, must be presented to the probate judge. Either the estate administrator or probate attorney delivers these documents to the court house in the county where the decedent resided.
The Administrator is responsible for providing documents to probate lawyers, taking inventory of the decedent's assets, distributing assets to heirs, and filing a final tax return on behalf of the decedent. Probate executors must report to the probate judge and provide written documentation to show all facets of handling the estate are in order.
If the decedent owned real estate, directions for care and distribution are outlined in their Will. If a mortgage exists, the estate must continue making payments on the loan or face the risk of having the property fall into foreclosure.
If the estate does not have adequate funds to maintain payments on the property, the estate executor can petition the court and request authorization to sell the real estate. In instances where multiple heirs are entitled to the property, each must agree to the sale.
Probate real estate provides lucrative opportunities for investors. Oftentimes, real estate held in probate can be a huge headache for the estate. In addition to mortgage payments, the estate must take care of maintenance, repairs, lawn care, property taxes, insurance and, in some cases, homeowners' association fees.
If heirs reside out of town, the estate may need to hire outside contractors to maintain the property. Otherwise, heirs will need to travel back and forth to oversee the property. Either way, this can place a heavy financial burden on the estate or the heirs. Although heirs can be reimbursed for travel expenses, they must wait until probate wills are processed and approved by the probate court.
In some instances, the estate simply does not have enough money to maintain mortgage payments. While heirs are not responsible for paying out-of-pocket, some choose to do so to avoid foreclosure. Oftentimes, heirs will sell real estate for what is owed on the note in order to eliminate the financial burden.
It is not uncommon for real estate investors to purchase probate real estate for pennies on the dollar. In most cases, probate property is generally in good shape. Not only can investors purchase the property significantly under market value, they usually do not have to spend a lot of money returning the home to good condition.
Investing in probate real estate is a secret weapon that not too many investors are privy to. If you would like to add this weapon to your arsenal of investing tools, we invite you to learn more in our probate and real estate investing article library.
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Last, but not least, if you are entitled to probate inheritance and in need of cash, contact Simon Volkov today. We might be able to offer you options you did not realize existed.