Let’s unpack the issues surrounding buying a property that is wrapped up in an estate.
First, what is an “estate.” Many people hear this word and think only the rich and famous have estates. The word sounds like money, and let’s face it, many of us have loved ones who pass away who do not have large bank accounts and extravagant homes. Even without all of those trappings, individuals who pass away still leave behind an estate. An estate is simply the legal vessel that contains everything you leave behind. If there’s a car, it’s in the estate, if there’s jewelry, it’s in the estate, and if there is a house…it’s in the estate.
Second, what happens to a person’s estate can be handled in two ways: 1) the person leaves a will or a trust that identifies what that person wants to happen to their estate; or 2) the person does not leave a will or a trust and the laws of inheritance kick in.
Third, let’s focus on when there is a will that clearly defines who receives a piece of property from a person’s estate. The will may leave the property to more than one person. When this occurs, each person will have to grant their interests in the property to the buyer for the transaction to be properly completed. If you only have the interests from one buyer, then you only have whatever interests they can convey to you, which likely will leave some ownership of the property outside of the buyer’s hands. Another thing to be aware of is that many times, the interest of a person who has been granted property can split if they pass away. It could then be owned by multiple children or various heirs leaving you to track down all of those interested parties to make sure you possess all interests related to the property as you or any buyer prepares to purchase it.
Fourth and finally, know what to look for. If someone tells you they have the authority to sell a property to you through an estate you should check to see one of two documents: Letters Testamentary or Letters of Administration. Both of these documents mean a person has authority to act on behalf of an estate. Letters Testamentary means there was a will, Letters of Administration means there was not a will. Either way, the person who was legally issued either of these documents has the legal authority to act on behalf of the estate. If the estate has granted properties to individual beneficiaries, then the person who was granted “Letters” has the authority to convey the property to those people. Or if the estate has granted them the authority to simply sell the property, then they can take that action under their authority. All of the information provided is to be considered general information and should not be relied upon as legal advice. You should contact an attorney if you have specific legal questions. RS Johnson Legal, PC can be reached atwww.rsjohnsonlegal.com | 404.862.6922