When real estate and other valuable property are left to loved ones, it often is not just given to a single named beneficiary. Many parents leave a home or other property to all children to be divided equally. During probate, the executor of an estate commonly will sell this property and divide the profits among beneficiaries. Selling California property through probate is a bit different than selling a home you own outright, which you must keep in mind when listing and negotiating a sale.
The process of selling California property through probate is a bit more complicated than selling property under any other circumstances. Any property under probate must first be appraised by the probate referee. This value generally establishes the price that you must get for the property without additional legal hassles. After you have an appraisal, the executor must notify all interested parties (usually beneficiaries of the will) of an intention to sell the property in writing and obtain consent.
If a beneficiary objects, the executor can offer them an opportunity to buy the other shares of the property or seek probate court approval to sell the property regardless of any objections. When multiple parties want to buy out shares of the property, this must be mediated by Probate Court. The Probate Court has ultimate decision-making power to determine whether or not a sale objected to by any beneficiaries of a will should go through.
Once you have the fair appraisal approved by the Probate Court and consent of relevant parties, the executor can choose any list price and sell the property. Under the California Independent Administration of Estates Act, an offer can be accepted without Probate Court approval so long as it meets at least 90% of the appraised value of the property.
What If California Property in Probate Isn’t Selling?
Of course, when the real estate market is sluggish, it’s not always easy to get an offer that reaches 90% of the appraised value of a property. The hassle of maintaining an unused property can be prohibitive and costly. In these cases, the executor can entertain lower offers, but they cannot finalize the sale without Probate Court approval.
Generally, the court will approve such decisions in these cases unless a beneficiary objects to accepting a lower offer. If any party objects, many factors will be taken into consideration by the court, and the ultimate outcome will be less assured. Sometimes, if all offers fall well below the appraised value of a property, an executor will choose to contest the appraisal and request that it be redone by another party.
After closing, the proceeds from the sale of the property become a part of the estate. They then will be divided in accordance with the will once the probate process has been completed. An executor still cannot simply turn the money over to beneficiaries right away.
Selling California property through probate can sometimes be a frustrating process for everyone involved, which is why many people choose to spare their families the added steps by putting property in a living trust. This trust will not be subject to probate at all. If you are interested in learning more about how you can help your family avoid the stress of probate, the probate lawyers at Larsen Law are always available to help.