Generic Probate

Introduction

The purpose of probate or estate administration is to gather the assets of the decedent and sell assets as needed to obtain money to pay expenses of administration, to pay claims against the estate, and to distribute money and/or assets to the beneficiaries. The intent of this Section is to provide a general understanding of probate. Issues and laws peculiar to a particular state should be addressed to WFG’s Underwriting Counsel in that state. This Section will answer the following five questions:

• Why is a probate necessary?
• When does title pass?
• Who has to sign deeds?
• What probate documents need to be recorded? and
• What types of probate are available?

Definitions

Before addressing those five questions, some terms have to be defined for a general understanding of probate.

• “Testate” means that the decedent died with a Will.
• “Intestate” means that the decedent died without a Will.
• “Devise” is a gift in a Will, and the beneficiaries in a Will are the “Devisees”.
• “Heirs” are the beneficiaries determined under the state’s intestate statutes.
• “Beneficiary” applies to both Devisees in a Will and to Heirs under intestate statutes.
• “Personal Representative” is the person appointed by the court to represent the decedent’s estate. However, the title of this person may be the Executor, Administrator, or Personal Representative depending upon the particular state where the probate is filed.
• "Letters of Administration" - the probate document appointing a Personal Representative may be “Letters Testamentary” if the decedent had a Will, or “Letters of Administration” if the decedent did not have a Will. In some states, “Letters of Administration” applies to the appointment of a Personal Representative in both testate and intestate estates. The term “Personal Representative” will be used in this Section to describe the person appointed to represent the decedent’s estate.

First Question - Why Is A Probate Necessary?

The question that we usually hear from our agents is the following: “If the Will is recorded and it shows three beneficiaries, why can’t we just get deeds from those three beneficiaries and skip the probate?” The reason that a probate is required is because the law will not recognize the beneficiaries listed in a Will (or the intestate beneficiaries if there is no Will) until a probate has been filed. Therefore, for title purposes, a probate is necessary to establish - legally, who the beneficiaries of the decedent are.

Second Question – When Does Title Pass?

After a title-holder dies, when does title pass to the beneficiaries? At death? When the probate is filed? Sometime in between? The answer is that title passes immediately on death to the decedent’s beneficiaries whoever they may be, and a probate is necessary to establish - legally, who those beneficiaries are.

Third Question – Who Has To Sign Deeds?

While title passes at death to the beneficiaries, the Personal representative has the right to divest title from the beneficiaries to sell the property to obtain funds necessary to administer the estate. Therefore, two interests have to be addressed to obtain marketable title: (1) the title held by the beneficiaries; and (2) the right of the Personal Representative to divest title from the beneficiaries. To eliminate those two interests, as a general rule, always obtain deeds from the personal representative and from the beneficiaries of the estate.

Some states, such as Florida, have special laws regarding homestead property where deeds from the beneficiaries are necessary. Other states only require deeds from the beneficiaries if the Will contains a specific devise of the property to the beneficiaries. Many states authorize the Personal Representative to convey real property and deeds from the beneficiaries are not necessary. You will need to check with WFG’s Underwriting Counsel of the state where the property is located to determine if deeds from the beneficiaries are necessary, or if a deed from the Personal Representative is sufficient to convey good title.

With respect to a Personal Representative’s authority to convey title, the state statutes may require a separate Order from the Probate Court Authorizing the Personal Representative to sell the property depending upon whether the decedent had a Will and whether the Will contains a Power of Sale. Check with WFG’s Underwriting Counsel in the state where the property is located to determine if a separate Order from the probate court is needed for the Personal Representative to convey the property.

Fourth Question – What Probate Documents Need To Be Recorded?

In a Testate (“Will”) Estate, certified copies of the following must be recorded:

• 1. Letters of Administration / Letters Testamentary – appointing the Personal Representative
• 2. Will
• 3. Order Admitting Will to Probate
• 4. Release of Estate Taxes and Inheritance Taxes, if applicable
• 5. Death Certificate (original to be recorded)
• 6. Order Authorizing Personal Representative to Convey – if a separate order is required
• 7. Release of claims against the estate

In an Intestate (“No Will”) Estate, certified copies of the following must be recorded:

• 1. Letters of Administration
• 2. Petition for Administration
• 3. Release of Estate Taxes and Inheritance Taxes, if applicable
• 4. Death Certificate (original to be recorded)
• 5. Order Authorizing Personal Representative to Convey
• 6. Release of claims against the estate

The reason that a certified copy of the Petition for Administration is required to be recorded in an intestate estate is because in a testate estate the Will usually contains a list of the beneficiaries of the estate, but in an intestate estate there is no Will listing the beneficiaries. Therefore, we will rely on the allegations in the Petition for Administration regarding the identity of the decedent’s heirs together with an affidavit from the heirs listed in the Petition confirming that they are all of the heirs of the decedent. Of course, if the probate court enters an Order of Distribution listing the beneficiaries, or if the Personal Representative executes a Distributive Deed to the beneficiaries, a certified copy of the Petition for Administration and the related affidavit from the heirs would not be necessary.

Regarding a release of creditor claims, in many states a deed from the Personal Representative to the buyer will be sufficient to release the property from creditor claims against the estate. The creditor claims would then attach to the proceeds from the sale of the property.

Some States have a shortened probate procedure known as a Summary Administration. If a summary administration is the type of administration being used, you should record a certified copy of the Order of Summary Administration because those Orders typically describe the property and list the beneficiaries who received title to the property.

Fifth Question - What Types Of Probate Are Available?

There are different types of administration and they vary depending upon what state the probate is filed. Formal Administration, which is sometimes referred to as a “full administration”, takes longer to complete and requires a Notice to Creditors and the appointment of a Personal Representative. Summary Administration, which is faster than the Formal Administration, is usually limited to estates that do not exceed a certain dollar amount and where the decedent has been dead for a certain number of years. Generally, a personal representative is not appointed and there is no Notice to Creditors. Ancillary Administration is required when the title holder’s probate is filed in one state and the property is located is a different state. The state where the property is located may require some type of probate which is usually known as an ancillary administration. There can be ancillary formal administrations and ancillary summary administrations.

Non-judicial procedures. Some states recognize Affidavits of Heirship that have been recorded for a certain number of years and will accept deeds from the persons listed in the Affidavit without a probate. Some states recognize a Will that has been recorded for a certain number of years and will accept deeds from the persons listed in the recorded Will without a probate. Check with WFG’s Underwriting Counsel in the state where the property is located to find out if either of the foregoing is allowed.