Decedent's Estates and the Sale of Real Property

We get many questions regarding the sale of real property that occurs after the title holder is deceased. For the most part, we have to follow the guidelines of our title insurance underwriters. These guidelines evolve from a combination of Kentucky case law and the KRS, as well as risk analysis and assessment. Included below is a simple outline that details the steps needed and action required when the title holder of real property is deceased.

I. Testate - Decedent had a Will. The Will must be probated.

A. If the Will contains specific power to sell real estate (the Will must specifically mention real estate), only the Executor or the Administrator With Will Annexed (W/W/A) is needed to convey the real estate and the proceeds check shall be payable to the estate.

B. If the Will does not give specific power to sell real estate, either:

i. A court order allowing the Executor or the Administrator W/W/A is needed. This is set out at KRS 389A; or

ii. The Executor/Administrator W/W/A can sign as well as all the heirs and their spouses with the proceeds check made payable to the estate. However, this option can only occur after the expiration of six (6) months from the appointment of the Executor/Administrator W/W/A. If the closing is to occur within the six (6) month period, the KRS 389A court order is needed.

II. Intestate - Decedent did not have a will.

A. If an estate is opened and administered:

i. The Administrator needs a KRS 389A court order allowing the estate to sell the real property, or

ii. The Administrator can sign as well as all the heirs and their spouses with the proceeds check made payable to the estate. However, this option can only occur after the expiration of six (6) months from the appointment of the Administrator. If the closing is to occur within the six (6) month period, the KRS 389A court order is needed.

B. If there is no probate:

i. Record an Affidavit of Descent, and

ii. All heirs named in Affidavit of Descent and their spouses muse sign the deed conveying the property.

iii. There is a two (2) year wait period from the date of death before this can occur (See KRS 396.011).

Remember, these are guidelines and there may be exceptions. If you need further information we are always available.

Existing Home Sales Fall in December

It seems the the extension of the $8,000.00 First Time Homebuyer's Credit caused December home sales to decrease at a considerable rate. There was a decrease of 16.7% from November; the largest in 40 years. This decrease hurt business for the month of December, but the extension of the credit time frame, as well as the addition of the $6,500.00 credit, will ultimately payoff in the late spring. It is a very good time to be in the market for a new home. See the link for more information: Washington Post Article

New IRS Form Available For 1st Time Home Buyer Credit

Form 5405 is now available from the IRS. The form must be filled out, signed and forwarded to the Internal Revenue Service to enable First Time Home Buyers to take the $8,00o tax credit for tax years 2008 or 2009. http://www.irs.gov/pub/irs-pdf/f5405.pdf