As you can probably imagine, I get asked a lot of questions about probate estates and trusts. Most of them fall into the “What happens when…” or the more specific question, “We have this situation…” categories.
Of course, since many of the vital facts are missing, it’s difficult-if not impossible- to provide a ‘sound bite’ answer that applies to every case. So, people are sometimes put off by my attorney-like answer, “It depends.” That’s the correct answer, and a clue as why estate deals can be so profitable.
However, the question that no one has asked me to date is: ‘Why do people probate estates?’
The answer is that it usually involves the need to either transfer or encumber real estate by someone who intended to benefit: heir, beneficiary, creditor or government agency.
So, when somebody dies owning real estate, doesn’t it automatically get probated? The answer may surprise you…
No!
When my Father died many years ago, there was no probate. My folks had planned ahead and since they owned their home as joint tenants, there was very little action required.
However, I (and my referral sources) routinely come across properties that are vacant and appear abandoned which are later determined to be in name of a deceased person. If the property taxes are delinquent and no probate action filed, I then call these properties “orphan houses.”
Unless and until someone finds it advantageous and necessary, no probate action is started. This is why I will occasionally have someone (either an attorney or a client) contact me about a property that was owned by a person who died ten, twenty even fifty or more years ago!
Incredible as it may sound, family may live in a property and merely continue to pay the property taxes (maybe even make mortgage payments) and continue on with their own lives, sometimes for several generations. It’s only when they want to sell or borrow using the property as collateral does the probate legal action come into play.
Of course, properties occasionally fall through the cracks of the system and just sit, apparently abandoned, free and clear of mortgages and liens, and are missed by public agencies like county administrators who are not looking to add to their already over stressed departments. These are called opportunities…
