When dealing with the sale of real property out of an estate, there is one last step to determine who will need to sign documents. Remember, it is first necessary to confirm if the decedent had a will, that probate was opened in the correct county, and to locate any heirs or beneficiaries. Once that has been done, there are two more factors to consider: notice to creditors and the final accounting.
Notice to creditors is a filing that takes place as part of the probate process. This notice alerts potential creditors of their right to file a claim against the estate for outstanding debts within ninety (90) days. This is important because if the sale of real property occurs prior to notice of creditors being published, the sale is void as to creditors of the estate. This means that if notice has not been published at least once, the closing will likely need to be postponed or creditors may still have a claim against the real property.
The second piece of the puzzle – the final accounting – also plays a critical role. If the final accounting has not been approved, the sale of real property is void as to creditors of the estate unless the Personal Representative (i.e. the Executor or Administrator of the estate) joins in signing the deed. This means there are three possible scenarios, summarized as follows:
- Notice to creditors has not been published and the closing will need to be delayed;
- Notice to creditors has been published but the final accounting has not been approved, which means the Personal Representative will need to sign documents in addition to any heirs or beneficiaries; or
- Notice to creditors has been published and the final accounting has been approved, which means that the heirs or beneficiaries should be the only necessary signers.
This can be one of the most complicated factors when selling real property from an estate. It is therefore crucial to determine how far along the estate is in the probate process. Providing proof to the closing attorney that notice to creditors has been published and/or that the final accounting has been approved is extremely helpful to ensure that closing goes smoothly.
Now that all of the pieces of the puzzle have been identified, the final step is to put everything together in order to have a full picture of who will need to be involved in signing the seller documents at closing. That will be the topic of the next, and final, post of this series.
Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.