When Estates Become Part Of Your Closing

We routinely get the frantic call from a realtor or closing party to address a title issue or incident involving a deceased buyer or seller, or even a prior party further back in the chain of title. Those inquiries come with the urgent questions: Can you fix it? Can it be done before closing? How much will it cost?

Previous blog articles have addressed some of this (“I See Dead People (On Title)!”), and the ultimate answer remains “it depends”! There are many factors that will need to be evaluated that are not usually evident at the time of that first phone call or email. And sometimes it can take weeks to gather enough information to provide more certain answers, and then start the document preparation process and start the administration of the trust or estate.

DOCUMENTATION: In addition to delays in receiving the necessary documentation (wills, death certificates, addresses of heirs), sometimes the people who are to be responsible for the administration of an estate (trustee or personal representative/executor) are unwilling to serve or are uncooperative or unresponsive. This can lead to weeks of delays in just getting the document preparation started and/or signed.

HOMESTEAD: If the property being sold is or was the homestead of a deceased buyer or seller, we will need to take a further look at the circumstances of a homestead claim and status of family members. Homestead property might not pass as expected to beneficiaries in the manner drafted in a will or trust document. Sometimes it can result in an expedited administration process, but more often it can require additional documents, waivers or consents. Title underwriters are very concerned about addressing homestead property issues particularly and completely.

MINORS: When a minor is a beneficiary of an estate that needs to convey real property, extra steps must be taken to get a party named as a guardian of the minor. This requires a separate court proceeding that may end up being quite involved and can take additional time for documents and hearings. It also may require refereeing family disputes. Again title underwriters have specific additional requirements that will need to be addressed.

COURT PROCESS: While the court process of probate can be predictable and methodical, when there is an urgency of closing a transaction, the systems and requirements for documentation and hearings established by each probate judge will have a great effect on how quickly the necessary court order can be obtained. Every county has different probate judges and processes, and this results in a degree of uncertainty in predicting time requirements for getting any necessary court authorization. Sometimes we can get our orders and authorizations quickly, and sometimes it can take months.

TAKEAWAYS: The best approach to take when one of these surprises occurs is to try to be flexible and attentive to these new and unexpected requirements. You will likely need to get contract extensions. You will sometimes be put in the middle of family dynamics and feel the need to help collect documents and communicate. Arguing, venting and yelling at your closing agent or the attorney trying to handle the administration for you rarely is productive and does little to speed up the process. Ideally, being both prescient and prepared can be of great help by asking closing parties if they have current estate plan documentation, powers of attorney, and property funded in their trusts or addressed in a life estate deed (most of those topics are also covered in prior blog articles which can be found at our blog pages here.)

If one of these surprises occurs, make sure that a competent estate planning and real estate attorney are involved to help move towards the necessary solutions as quickly and efficiently as possible.

Sincerely,

Christopher Caswell, Esq., ccaswell@berlinpatten.com
Berlin Patten Ebling, PLLC

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

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