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What is a probate sale?
The sale of an owner’s property after his death is referred to as a “probate sale.” A probate sale may include real property, such as a home, land, personal possessions, and any other asset that can be converted to cash. A court normally supervises sales, and proceeds are divided among creditors and heirs.
If you have spent time house hunting, you may have come across a probate sale. Such a property is being sold under the supervision of the probate court because the owner died without bequeathing the property to an heir. The probate process is time consuming and there is a lot of paperwork. It generally takes between 18 and 36 months to close a case.
Example of a probate sale
Say a parent dies without a will. Some states do not require that estates go through probate as long as they are small enough, but most states will have some say in the process. Check the laws of your state regarding the necessity of probate. In most states, a probate case requires that you take certain steps, including the following:
- Ask the probate court to name you executor, personal representative, or administrator (the title varies by state).
- Wait until your request has been approved.
- Depending on the state, you may be required to post a bond, which is an insurance policy of sorts that protects the estate if you somehow cause it to lose money.
- If there is a will, you need to prove that it is valid. A notarized witness statement or court testimony from a witness is normally required.
- Gather assets and open a bank account in the name of the estate. Creditors will be paid from this account. It must stay open for approximately four to six months.
- Assets may need to be appraised so that the court has a fair idea of their worth.
- Once the creditors claim period has passed, all debts have been paid, disputes settled, and taxes paid, the case will be closed. The court will want an accounting of your activities, including which creditors were paid and where the rest of the assets ended up.