Probate

May I introduce Eileen Burns who is a licensed realtor for 30 years in south east Florida.  Eileen has followed the trends from listing and selling luxury homes along the

Atlantic Ocean to listing and selling Miami Beach apartment buildings and shopping centers.

More recently, Eileen has sold several hotels and land deals in all parts of the State of Florida.

Her mother was instrumental in seeking out more information on probate real estate.It took three years for her Mom to update her will and get all here wishes in writing.

During this process…Eileen became a Certified Probate Real Estate Specialist as… she expresses… 78 million baby boomers are turning 65 years of age every 10 seconds for the next 11+ years. 1946-1964.  Half the population passes away without a will. Look at the celebrity cases like Prince, Aretha Franklin and Michael Jackson…no planning for all those affected by death, infighting with the heirs and so on.  What an niche opportunity for all real estate agents to serve this market!

Welcome to the call….  thanks Marte

  1. How long have you been handling probate transactions Eileen?

I closed my first probate in 2012 with a commercial warehouse property in downtown Fort Lauderdale.  I closed my second probate with the same family as the decedent also owned a luxury ocean front condo in Hallandale Beach, Florida.

  1. How did you get to list these properties?

My 20+ year alliance with East Coast Title Services Fort Lauderdale and the partner Attorney

 

  1. Please share with our listeners what exactly is probate?

In the context of real estate, it is a court process that authorizes

the sale of the real estate to a prospective buyer OR the release

and transfer of real estate to a decedent’s heirs.

Back in 1784 the State of Massachusetts established the first probate court.

Two things you can’t avoid – death and taxes – which is the primary function to collect taxes.  You avoid probate and you can save thousands of dollars by creating a fully vested Living Trust or a will.  Probate is public information and Trusts are private. All the assets in a properly drafted trust are transferred into the trust.  Only about 5% of the population create trusts in USA.  Remember if you re-finance a property you need to put that property back into the trust once you fund otherwise the property will need to be probated.

 

  1. How long is this probate process?

In the State of Florida it takes 9 to 12 months or more to close the estate. It is necessary to engage the services of an attorney in Florida to probate.  That being said, it takes about 4 months here in Florida to obtain documents that give the authority to the Personal Representative…the person not named in the will… or the Executor..the person named in the will of the estate to sell the real property.

  1. Is probate necessary if the owner had a will?

Maybe.  The need to probate is not determined by the existence of

a will.  A Last Will and Testament is a set of clear instructions IF

probate is necessary.

 

  1. SO, when is probate necessary?

Probate is necessary if the title to the property terminates in the name

of the decedent.  In Florida, if the deed to the property was executed as

husband and wife, then the property would pass directly.  No probate would

be necessary and that person would be free to sell the property if they so desired.

Often times that person may wish to down size or move to another State.

 

However, if the decedent owned a rental property in a sole name and that person

passed, the property terminated and does not automatically pass to anyone.

 

Formal administration of an estate is necessary when all non-exempt assets are

valued at more than $75,000 and less than 2 years have passed since the date

of death.

 

In Florida we have a process called Homestead.  Your property taxes cannot increase

more than 3% per year if this is your primary residence and you registered as such at the County office.  Title examiners will require an Order Determining Homestead Status of Real Property.  A petition should be filed as soon as possible to request this determination.

 

The Homestead Order protects the property from unsecured creditors such as credit card banks and medical bills.  It does not sever any existing mortgages on the property.

Some judges will not sign the Homestead Order until the 90 day creditor period has

expired.  Hence the notice to creditors should be published as soon as possible.

 

Once entered, the property is severed from the probate administration

and the property is officially released into the names of the heirs.

 

If the Florida property is a second home, vacation home or non-homesteaded, it is not protected from claims against the estate.  If decedent had a primary home in another State, then an Ancillary probate must be opened and a notice to creditors should be published to begin the 90 day creditor period.  During the 90 days creditors can file claims against the estate.

 

If there is a will that grants the Personal Representative powers to sell the property then the property can be sold by the appointed PR but the proceeds must be held in an estate checking account until the probate administration is complete.

 

If there is no will or the will does not expressly grant PR powers to sell, the PR must seek court approval prior to selling the property.  This can delay a closing up to 30 additional days depending on court schedules… is it summer or holidays where more time can be tacked on.

 

Story:  A man called me from New Jersey.  I sent a letter to his wife and he wanted more information.  Her Dad lived in Lauderdale By the Sea in a  luxury condo on a low floor.  His wife has a sister and a brother and she was designated the Executor of the estate.

 

Three other brothers and wives of the decedent lived in this same condo tower and they were all experts on real estate value.  They live on higher floors with wrap around terraces and renovated units.  The brother that passed away was not as fortunate.

 

Everyone had a key to access this condo!  Sister was taking long weekend vacations to stay and using the display towels without laundering them and returning the towels to the bathroom racks…just stacking the laundry in the walk in closet. She did not even wash the sheets. Uncle so and so took the kitchen furniture long before the sale was closed.   Everytime an offer came to the table they all had a say in value.  PR made a decision, siblings attempted to block her.  Sister bought another property in New Jersey and was using her proceeds from her inheritance so she became highly cooperative to make the sale happen.  Brother was in business with the Dad and they needed to open an ancillary probate in New Jersey….no one told them.  Their probate attorney did not advise he does not handle real estate closings….so many challenges popped up requiring solutions!

 

WELL that is a mouth full Eileen!

 

  1. How do you connect with Executors and Administrators?

My referral relationships with real estate attorneys, title companies, elder law, immigration lawyers, Adult living facilities, financial planners, CPAs, bankers, out of state real estate agents.

 

I also use a paid service in my tri county area.  Anyone who files for probate at the county court house is a contact for me to engage first by letter. Often times they already have communicated with an attorney in my State.  I become their solution provider.  I listen to their story about their loved ones or caregiver stress and grief that they are currently experiencing in addition to this new role they undertake. Patience is required!

 

The Executor or the Personal Representative has a fiduciary obligation to identify the assets:  are bank accounts in one name or more, retirement accounts, life insurance policies, mortgage to pay, lawn service to maintain property and pool, cable companies, phone providers, car leases, property taxes, water bills, electric bills and more…

 

notify the creditors

pay liabilities

Pay funeral expenses

Pay attorney fees

distribute remaining assets to heirs

probate the will

file a tax return

secure the property

Obtain an appraisal

 

  1. What is your conversation with the Executor or Personal Representative?

I ask questions… are you a member of the immediate family?  Are you the surviving spouse?  Is there a will? Do you or family members disagree with the will?  Did your attorney explain the probate process to you?  What can I help you with?  Are you planning to sell the property or do you wish to rent it?

 

I deal with a number of out of state administrators so I ask them when was the last time they visited the property?  How many people have keys to this property?  Do you know the condition of the property?

 

Story:  I leave probate brochures with my community banker.  A lady who lives in Colorado calls me the next day to say her aunt passed away in Florida and she is the only living heir.  Can I help her?  Depends.  She tells me she had no idea her aunt was in failing health and she was dead 4 days before anyone contacted her.  She would be in town 3 more days and could I meet her at the property.

 

The lady had two cats that the niece knew of.  However, when niece arrived to the home the neighbors told her she was also feeding more than a dozen ferrel cats in the neighborhood.  When she opened the door she needed a mask as the smell of cat urine was overwhelming.  The home is a two story in a home owner association development.

 

Did I mention it was carpeted throughout?  The niece filled one dumpster with items and gave up on the rest.  She wanted to know value and who the fast buyer would be?

 

An investor of course.  We closed a week after she obtained her Letters of Administration

 

 

  1. Does a probate listing demand more of your time than other listings?

Yes Marte… it requires planning and preparation.  You cannot treat it like a normal transaction or your buyers and sellers may become frustrated with delays and missed deadlines or premature closing dates.

 

Consider the timing of the transaction as well… summers and holidays slow down all court activity.  You will need to add additional language to allow for probate contingencies.  Buyers and sellers who are notified ahead of time are much more understanding and patient.

 

  1. What is the most difficult aspect of handling property in probate?

Waiting for the authority to sell the property.  Many times the PR does not realize

The magnitude of the job they have just taken on as a PR or Executor. They lose patience with the court if they are ready to sell.  Even when they think they are ready most times they have another life and family and work to attend to and believe this will be a smooth and fast process.  They have no idea about the challenges they will face going forward.  I see S T R E S S to some degree in each probate I have handled. It is best to assemble a team to help you…

 

  1. What is the most rewarding part?

The conclusion when the PR or Executor can breathe knowing the major asset has been sold, rented and they can move onto the next set of challenges that are required by the court to close the probate.   Remember, it takes 9 to 12 months here in Florida.

 

Other States have different requirements so it is wonderful to have a large network of Certified Probate Real Estate Specialists throughout the country who understand the language of Probate and possess the skill set to take the listing and close the listing in my network.

 

  1. What additional services are needed for probate properties?

Repairs, painting, estate sales, clean up, obtaining a bond if necessary

 

Story  the current probate I am working, the decedent was a hoarder.  She moved from Freeport, NY to Sebastian, FL and most items ended up in the garage unpacked for the next couple of years.  It is a beautiful 3 bedroom, 2 bath pool home on a cul du sac, a block from the Indian River.  They arrived as a couple and the husband passed first and then the wife passed 8 months later.   Luckily there is a will and an Executor who comes from the State and New York who has had probate experience with both of her parents when they passed.  However, nothing prepared the Executor for the mission ahead.  Some credit card companies do not cancel the cards nor does the insurance company pay off a policy without the proper documents.  The Executor could not understand why it took 4 months to obtain this authorization.

 

Before opening an estate checking account she paid the property insurance out of her pocket several thousand dollars and had to wait far too long to be reimbursed as they told her the payment was overdue but that was not the case!

 

So bills are mounting.  5 cable boxes to return.  Pool maintenance, landscaping and deciding what to do with all the items in the home has been very stressful for this Executor.  It has taken 5 months to get the home emptied and we are one week away from closing.

 

The decedent had two long haired cats who decided the living room furniture would be their new litter box while the owner was hospitalized prior to passing.  Most of the home is tiled but living room and bedrooms are carpeted.   Hair..hair…hair everywhere.  While awaiting and opening at pet rescue, one cat passed away and a friend finally took the other cat 3 months later.   Executor was there every day to feed the cat in addition to clearing the home.  Good thing the Executor was retired and living nearby.  This is not always the case.

 

Guest bedroom closet was filled with shoes and boots.  Third bedroom is used as an office…paper..paper….paper everywhere and in no particular order.  The Executor decided to tackle paper work first to find titles to the car and boat, tax returns, the will, bank account information, insurance policies and so forth. Containers filled with envelopes dating back 10 years…stressful.  Open the container it would be 2010 on top, 2018 in the middle…2015 on the bottom…so each paper had to be touched.

 

You cannot even walk into the master bedroom closet as it is brimming with clothes.

 

The decedent was a Betty Boop collector and we counted more than 331 pieces….that was before the garage was conquered.  This collection is now boxed up and being sent to Executor’s home to deal with after the sale closes.

 

After reading the will, items had to be located…jewelry, coin collection — assets for distribution to the heirs.  Repairs were needed to the pool pump, soffet cleaning, pressure wash roof and dumpster rentals, thrift store pickups, meetings with probate attorney, prior liens on property to clear title…which should have happened when this couple purchased the home.   Lots of magical items I called challenges that require solutions.

 

  1. What percentage of PR/Executors want to sell as is and not deal with getting the property ready?

So far all but as you heard from some of my stories that is not always possible.  There are consequences for all decisions.  If PR decides not to do anything, the estate may not necessarily get highest and best price.  Sometimes there is no money for fixing up and PR has no choice.

 

  1. Is there anything special you have to do with regard to closing?

Establish a relationship with the probate attorney and make sure to ask if they also do real estate closings?  Some do not and you may have to help make arrangements for a title company or attorney to handle the property closing.

 

  1. What advice do you have for licensed real estate agents who are thinking about this probate niche?

Get involved…there is plenty of business for everyone.  Learn the language of probate, understand timelines, begin building and creating relationships with title companies, attorneys, estate sale folks, consignment shops

 

  1. What should an agent learn before taking their first probate listing ?

Whether the person seeking to list has the authority to sell the property and obtain copies of these documents.

 

  1. What tips can you offer agents taking the listings?

Ask right away about potential estate creditors… Claims against an estate can eat up profits from the sale of a non-homestead real estate.  Ask if there are any significant creditors (medical debt is often the sneakiest).  This information will likely have an effect on your purchase price negotiations.

 

The Estate is not the Seller of inherited homestead…In a purchase and sale agreement the actual heirs should be listed as the sellers, not the estate of or the Personal Representative/Executor.  However, if the court authorization is sought to sell the property BEFORE homestead order is issued, then the estate/PR will be the seller in the State of Florida.

 

well this has been an informative session Eileen.  How do people contact you should they have any questions?

 

They call call me direct at 954-483-3912 or email me at info@FloridaProbateAgent.com

 

Please remember Probate is different in every State.  There are many conditions and restrictions Full authority vs. limited authority, without bond vs. with bond which we will not have time to delve into today.