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How Does a Probate Court Transfer Title to Real Estate?

Posted on August 4, 2022 in asset protection,estate planning,probate

The answer is: it depends.

  1. If the property is community property, i.e., property held by a married couple,  and it is titled as “community property with right of survivorship” then title to the property transfers to the surviving spouse outside of probate.
  2. If the property is community property but not titled with rights of survivorship, the surviving spouse gets a one-half interest in the property, and the decedent’s share may be disposed of through their will, or if not addressed in the will, it will go to the surviving spouse, meaning the surviving spouse receives all of the property.
  3. If the property belonging to the decedent is not community property, but is, instead, their sole and separate property, and that person dies with a will, the probate court will order that title to the real property be transferred to the designated beneficiary/beneficiaries according to the instructions in the will.  Transfer of property is generally done by way of a quitclaim deed.  If there is more than one beneficiary, title to the real estate will be distributed to the beneficiaries as “tenants in common”, meaning each beneficiary will receive an equal percentage of ownership.  For example, if there are five beneficiaries, each individual will receive a one fifth interest in the property. Each beneficiary is entitled to sell their share to an outside party or to another beneficiary, or they can simply keep their interest in the property and leave it to beneficiaries in their will or trust.
  4. If the decedent dies without a valid will, then there are statutes that designate who will receive the decedent’s separate property.  If there is a surviving spouse with and no children, for example, the spouse will receive all of the property outright, subject to the payment of valid creditor’s claims.  If there is a spouse and only one child, the property will be distributed 50% to the surviving spouse and 50% to the child as tenants in common.  If there is a spouse and more than one child, the surviving spouse will receive one-third of the ownership interest, and the remaining two-thirds will be distributed to the children or their estates.  Other statutes provide what happens to the property if there is no surviving spouse, or no children.
  5. During the probate process, the beneficiaries may also decide to sell the real estate to an outside party. If this is the alternative chosen, under Nevada law, the court must first approve the sale.  Part of this approval process entails the court taking bids on the sale of the property in open court, which is accomplished by the court conducting a very brief live auction, during which, anyone wishing to purchase the home for above the sale price already offered by the first buyer, may signify their intent to the court during the auction.  The original buyer may also participate in the auction.  The reason for the court approval is to help ensure that the estate administrator is not selling the home at a price that is detrimental to the beneficiaries.

There are a number of other variables that can occur during or outside of probate, especially if there is a dispute as to the validity of a will, or when beneficiaries cannot agree on whether property should be sold or transferred to the beneficiaries, which highlights the need for legal counsel to assist with the process.