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Sell A House in Probate

Firstly, if you’re going through this situation, we’re sorry for your loss. 

This is a trying time to be dealing with going through someone’s personal property, let alone trying to figure out what needs to be done to the home. But before you discuss with family members what the next steps are, you need to find out where you stand legally. 

Even if a will was left, the Estate, including the house, still may need to go through Probate in Wisconsin. Probate can be a lengthy process that may even take several months or years to complete. You’ll want to know what the laws are in Wisconsin regarding probate and when it would be an appropriate time to sell the inherited property. 

Below we’ll cover all you need to know about probate in Wisconsin and how it may affect your timeline and plans to sell. Before you do anything, it’s essential to know the laws. 

How To Sell A House In Probate In Wisconsin

Probate sign, stack of papers and gavel

What is Probate in Real Estate?

To begin, what is probate in real estate anyway? Probate in real estate is the official way a deceased person’s estate is settled after his/her death, and the ownership of his/her assets is transferred after their passing. This process includes satisfying the person’s final wishes, paying out assets, dividing property to beneficiaries and heirs, and resolving outstanding debts and taxes. All of which must be done according to Wisconsin state laws and sometimes under a state court’s supervision. 

This process is just to make sure that the deceased’s wishes are carried out according to the law. Probate will also ensure that the rights of beneficiaries and heirs are protected. In most cases, the probate process is based on the terms found in the person’s will; however, if there is no will, then probate moves forward under default probate laws in Wisconsin. 

Now that you understand what the probate process is, real estate is usually a part of this process because it’s one of the biggest assets a person owns. And usually, real estate or any other property has to go through the probate process but is subject to the person’s estate planning.

When Does Probate Start?

The simplest answer is once the person passes away, is when probate officially starts, although Wisconsin has time limits as to when the estate must be closed. Currently, Wisconsin state law requires that an estate be closed within 18 months of the person’s death. However, several other Wisconsin counties have recently adopted statutes that require probate to be completed within 12 months of someone’s passing. But creditors have three months to file any claims against the estate once they receive a death notice. 

Even though the estate needs to close within 18 months of the person’s death, probate can take as little as six months. But for complicated or contested estates, the process can take two years or even longer. Often, the court grants a time extension for probable completion when a good cause for a delay is shown. This is usually seen with complicated or particularly large estates or when disputes arise among beneficiaries. 

Probate Laws in Wisconsin

The settling of an estate and satisfaction of the terms of a will are required under Wisconsin law. However, not all estates must go through Wisconsin’s formal probate process. Wisconsin, along with fourteen other states, has adopted a set of laws called the “Universal Probate Code.” These codes outline the general procedures that are required to settle an estate by probate. This process does require specific steps to be followed according to Wisconsin state law. However, the probate process is typically managed by a personal representative named in advance by the deceased, usually in the will. When no personal representative is named, the court will appoint one to fulfill the role. 

The personal representative’s duties include:

  • Identifying all assets and debts of the deceased 
  • Notifying all beneficiaries and creditors following the death
  • Paying all funeral costs
  • Receiving and managing creditor claims against the estate
  • Paying debts owed by the estate creditors
  • Transferring property and assets to beneficiaries and heirs
  • Filing outstanding tax returns
  • Filing estate tax returns within nine months after the passing of the deceased

Once that is completed, if any funds remain, the personal representative may distribute the remaining asset to beneficiaries and complete the Wisconsin probate process. 

However, some other factors may change the flow of the probate progression.  

Do all Properties Have to Go Through Probate?

Technically, yes. As mentioned above, settling the estate and fulfilling the terms of a will is required under Wisconsin law. However, not every estate has to go through the formal probate process. 

Smaller estates valued at less than $50,000 with a property that passes by a living trust can avoid the complicated probate process of formal probate under Wisconsin state law. 

Furthermore, if any accounts with beneficiary designations like life insurance policies or retirement accounts have named beneficiaries then those assets will pass to the person automatically following the person’s passing. In addition to that, you can avoid formal property in Wisconsin by adding a “payable on death” designation to financial holdings. 

Another way is by “right of survivorship,” which is typically seen with real estate. The surviving co-owner automatically owns the property following the passing of the other co-owner. 

Since Wisconsin is a “marital property state” if one spouse were to pass away, any asset under the marriage property exclusion automatically passes to the surviving spouse. 

So, to answer this question, do all properties have to go through probate in Wisconsin? Yes, however, they may not need to go through formal probate.

Should a Will Always Be Probated? 

If the estate in the will exceeds the small estate threshold in Wisconsin, it must move forward through the probate process before the estate’s asset can be transferred to the beneficiaries or heirs. However, this can be avoided if there is a living trust which is different from a will. 

The probate procedure is handled in two different ways: informally or formally.

Informal probate is where the transfer of the estate goes smoothly without issues. This is helpful because informal probate is less costly and tends to be handled through the mail. 

Formal probate procedure occurs with court supervision before a probate judge. Formal proceedings are generally required when there are disputes between beneficiaries about the estate’s assets or the terms of the will. 

How Long Should You File a Probate After Death? 

Generally, Wisconsin state law requires that an estate be closed within 18 months of the person’s death. However, here is a basic timeline of the Wisconsin probate process.

  • 1 to 4 months – A “petition for probate” is prepared to provide the will’s validity. The choice of an estate administrator, executor, or representative will be made and identifying all heirs and other relatives. 
  • 3 to 4 months- The Court will hold a hearing on the petition for probate, and the letters of testamentary will be issued.
  • 3 to 5 months- If ordered probate bond must be issued
  • 3 to 6 months- Notice is given to creditors
  • 6 to 12 months- An inventory and appraisals of the estate will be calculated to determine the value. Bills and taxes must be paid. Creditors’ claims must be accepted or denied. 
  • 7 to 15 months- Petitions must be filed for final distribution and accounting, then a hearing will occur and order approval. 
  • 9 to 18 months- Asset will be distributed to heirs and final discharge order.
  • 9 to 24 months- Final distribution of estate funds is made to conclude probate.

Selling a House in Probate 

If the plan is to sell the house in probate, you’ll need to keep in mind that the process involves a few more steps than a traditional home sale would. Below are some steps to keep in mind when selling a house in probate. 

Step 1: Make Sure You Can Legally Sell A House

The first thing you’ll need to determine is if you can legally sell a house in probate. When there is a living trust usually you’re able to manage assets without going through probate. A trust can also be used for the distribution of property upon a person’s passing. 

If the home was passed into your care through joint tenancy with a right to survivorship, or transfer-on-death deed, you could legally sell it without going through Wisconsin probate. You should be able to sell a house if you are a surviving spouse in Wisconsin. 

However, it would be best to get legal advice before selling a house in probate to confirm you can legally sell. If you’re a child or other relative of a recently deceased, it’s best to let the court sort out the will or consult with a probate attorney. 

Step 2: Determine a Selling Strategy 

Once you get official clearance to sell the inherited property and heirs and beneficiaries are onboard, you’ll need to figure out what selling strategy to use. You do have several options to consider, including selling with a realtor, selling by owner, or to a local investor. 

Selling with a realtor is a more hands-off approach than selling by owner; however, an agent’s commissions can cost 5-6% of the final sale price. The commission is split 50/50 between buyers and seller’s agents, which can cost several thousand dollars. Furthermore, you may be advised to make repairs or upgrades to the property prior to selling. This will increase your chances of finding a buyer, however, changes may take some time to complete and be costly. For a lot of people investing more money into a property that they have no intentions of keeping can be hard to justify. And there is no guarantee you’ll get a return on your investment. 

Another concern: listing with a realtor doesn’t equal a fast home sale. Currently, the average number of days on the market in Milwaukee is 54 before receiving an offer. Time of year also plays a factor in the chances of selling quickly. Because these two elements are out of an agent’s control, who knows when your inherited property will sell.

Selling by owner is less expensive since you would be saving on your agent’s commission; however, all aspects of the selling process will be handled by you. If you don’t live close by or are busy with other responsibilities, you may not have the extra time to dedicate to selling an inherited property. If you do have time, here is what some of your tasks would include: 

  • Figuring out a competitive listing price
  • Creating a marketing strategy
  • Writing a captivating listing description
  • Making repairs, cleaning, decluttering, and staging the house
  • Hiring a photographer
  • Answering questions from interested buyers and buyer’s agents
  • Hosting open houses
  • Negotiating
  • Handling paperwork,
  • And coordinating the closing process

But that’s just the tip of the iceberg. 

For many people to save only 2.5- 3% upon the sale of a home isn’t worth all the hard work and effort, which is why selling to a local investor has become more popular. 

Local investors are cash home buyers who purchase homes in as-is condition, which is really helpful when selling a house in probate that may need repairs or updating. Instead of figuring out how to make the repairs, worrying how much they are going to cost, hiring contractors, and monitoring all the work, you can just pass all those projects on to a home buyer. 

Cream City Home Buyers is one such buyer who purchases houses in as-is condition all the time and has a team in place to handle repairs. 

Another advantage of selling to Cream City Home Buyers is that they don’t charge realtor commissions or service fees and even help pay closing costs. They can make you a cash offer for your home within 24-hours of contacting them and close within 7 days, saving you months of uncertainty typically seen with Wisconsin home sales. 

Step 3: Get The House Ready to Sell 

After you decide on a selling strategy and everyone agrees to it, you’ll need to get the house ready to sell. If the house has been sitting empty for a while or has overdue maintenance, it would be a good idea to get the home inspected to determine what condition the property is in and what repairs are needed. Also, if there are still belongings in the house, you’ll need to go through everything with heirs and beneficiaries. Houses show better with fewer furnishings. 

Once repairs are made and the home is decluttered, you’ll need to do some cleaning and staging to get the house ready to sell.

cash offer from home buyer

Step 4: Wait For An Offer 

While you’re waiting for an offer to be made, it would be a good idea to prepare an account where the proceeds of the sale will go. That way the title company can disburse the funds accordingly. You will also need to determine who all needs to be present at the settlement. 

Hopefully, within a couple of weeks or months, you’ll be able to sell a house in probate officially.

Conclusion:

Going through the probate process can be lengthy, and when family members are involved can make things a bit tricky. If there is any confusion about the process, always seek the help of an attorney. It would be best to get legal advice before selling a house in probate to confirm you can legally sell. Sometimes, you’ll even need to submit something to the court to approve that the house can be put up for sale. 

To at least make one of the steps easy in this entire process, you can always work with Cream City Home Buyers to purchase this inherited property as-is. If you’re interested in finding out more about their home buying process and how selling to a home buyer compares to selling with a real estate agent, visit their website for more details. 

Cream City Home Buyers is also a BBB accredited business with an A+ rating. They help homeowners with unique selling situations, including probate, foreclosure, bankruptcy, major repairs, liens, unfinished construction, and much more. Find out how Cream City Home Buyers may be able to help you by visiting their website for more information.



This post first appeared on Cream City Home Buyers, please read the originial post: here

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Sell A House in Probate

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