You’ve been named the personal representative overseeing the probate process for a loved one. The tax is not easy and there are numerous steps involved. The probate process can tax a family and create stress for the personal representative, especially when he or she isn’t sure what is happening or what steps to take throughout.
What Is Probate?
Probate is the process in which property, including real estate, moves from a deceased individual’s ownership into the ownership of another person. All property, including real estate, fine jewelry, and items with sentimental value can go through this process. If you are appointed as the personal representative, it is your job to make decisions (if they have not already been made in the will) as to how these items will be distributed. You must also report back to the probate court what decisions were made and why.
10 Things You Need to Know
If you are a Personal Representative, there are several things you need to know as you go through the process. Keep in mind that laws for Maryland, Virginia, and Washington D.C. vary, therefore working with an attorney is always a good idea.
- Your first task is to identify all of the assets, collect those items, and make them available. This should include anything owed by the deceased individual including hard assets and cash. Once the assets have been identified, decide what will be sold (this includes larger assets such as a home to pay debts or to fund cash gifts).
- Get an appraisal for the value of each item. If the appraised value is less than the amount owed, you may still sell the property without the estate having to come up with the shortfall.
- When marketing the property for sale, the representative will need to accept offers as they come in. However, all offers must come with a 10 percent deposit. You have the right to accept or decline the offer at this time.
- Once you find a buyer for the asset, the court must confirm the offer. However, the seller is not committed to that offer (check with your attorney) even if the offer was accepted.
- Once all parties involved agree to the terms of the sale, the representative must send a Notice of Proposed Action to all of the heirs. This document states the details of the sale. Those heirs then have in most jurisdictions 15 days to respond with any objections.
- If objections occur, they are filed with the probate court. The court will hear the objections and then make a final decision on the process based on the circumstances.
- The court will ask if there is anyone else interested in purchasing the property, which is often done during the confirmation hearing. And, it is possible for someone to voice a counterbid, but that bid must be five percent plus $500 higher than the previous offer to be considered. An auction-style bidding process can occur during this time.
- Once the highest bid occurs, if any are presented, that person must submit the same 10 percent deposit and go through the same approval process from heirs.
- Contracts from the overbidding process cannot have any contingencies. In most situations, escrow is to close within 15 days.
- If no overbidding occurs, the property is sold and a check is given to the Personal Representative who is then responsible for submitting the funds to any heirs. Documentation of this is then sent to the court.
Being a Personal Representative, especially when dealing with real estate can be a challenge. Yet, the aid of an attorney can help to minimize some of these risks.