John's Florida Real Estate Blog

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Is a Will the Way to Go?

In the past two years I had 2 home sales that differed from most of the others. Both involved the deaths of two different sellers who were unmarried.

In Case A the seller died before putting her home on the market. After her death the seller's family was able to list her home with me immediately, and within a day I had a buyer who made an offer that was accepted. After financing was obtained and inspections were done, the sale closed without a hitch after just a few weeks.

In Case B I had put the home on the market and found buyers whose cash offer was accepted by the seller. However, the seller died just a week before the closing. Immediately the process ground to a halt. First, the executor of the will had to contact (and pay a fee to) a local attorney who sent papers, not only to the heirs, but to everyone in the family who might make a claim on the dead owner's estate. All had to agree that the executor could sign a sales agreement with the buyers I had found. Once that was done, the executor could also sign an agreement to at least let the buyers move into the residence while the lawyer and the courts did their work. In the meantime, one of the presumed heirs died and his children were added to the number of persons who needed to sign-off. Two months later the title company again needed all 14 possible heirs to sign-off on the sale. From what the title company told me, if just 1 of the 14 had refused to sign, the sale would have stopped until a judge could force the sale. Can you imagine how long that might have taken? Luckily, in this family all members cooperated and signed-off. We did finally close 3 months after the death of the seller. I am told that this was relatively fast. Any one of a number of things could have gone wrong and possibly killed the deal. As it was, the executor told me he had to pay the attorney $1,200 to handle this case.

What was the one factor that made the first deal go quickly and smoothly, while the second was a much longer ordeal? In Case A the seller and her late husband had created a Revocable Living Trust. Her home was held in the trust, and she and her husband were trustees and controlled the assets in the trust. When he died, she automatically became the sole person in control of the trust. When she died, the trust clearly stated who was to make decisions concerning the trust. In this case, a niece was the next trustee and could do what she wanted to with the home. All we had to do was give the title company a copy of the trust so they could confirm that it had the power to sell the home. If it had been a cash deal, she could have sold the home the next day. If, by chance, the niece had died, the trust clearly stated who would take her place. No probate, no judges, and no lawyers. Pretty painless.

I am NOT an attorney and cannot tell you how to create a living trust, or if it is advisable that you have one. Each person's situation is different in some way. Also, I imagine that each state has different laws concerning estates. I can merely relate the facts of two particular sales that involved the deaths of the sellers. What I can recommend to you is that you give it some thought and speak with your attorney and/or financial advisor to see if you and your family might benefit from the creation of a Revocable Living Trust. It may be that in your particular circumstances simply having an ordinary will is enough. Your attorney will be able to advise you as to which course is best for you.

If you have had an experience with either a will going through probate or the use of a revocable living trust, I would be interested in hearing about your experiences. Feel free to comment.

John Elwell - REALTOR

CENTURY 21

Bill Nye Realty, Inc.

813-783-4444

Licensed in Florida

 

Comment balloon 3 commentsJohn Elwell • June 25 2007 10:49AM

Comments

I am currently going through this process with one of my sellers.  I listed the house, the seller died several months later, the house sold shortly after, the son insisted he was in the will as executor...I told him the will would have to go through probate, he insisted NOT....that it was set up so it did not....of course he was wrong...it's been in escrow for 5 months, court date is July 5th.  If only they had gone with a trust!!!!!!!!
Posted by Mary Warren about 12 years ago

Something that I would have never thought of, a Revocable Living Trust.

 Interesting, thanks.

Posted by Ann Guy (NA) about 12 years ago

Ann and Mary,

 Yep, that was my first experience with a trust and it sure worked out well for them. No fuss, no muss. I guess there must be some downside, but no one has told me about it yet. In our area we have many retirees and having someone pass away between the listing of a home and the closing is not all that uncommon. If they have a surviving spouse, that is no problem. Just produce the death certificate and off you go. But if the surviving spouse dies, you get into the whole probate mess. I would hate to think what would happen if the seller died and then before it could go through probate one of the buyers died. Talk about a double whammy. Thanks for your comments.

Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) about 12 years ago

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