I previously posted a two part series entitled “The Transfer of Title and Sale of Real Estate after Death” which can be found here: PART I and PART II. This has proven to be a very popular topic – which is not surprising given the frequency that family members are left with real estate that must be transferred and sold.
My previous posts focused more on the technical aspects pertaining to the Executor’s authority to hold title and sell the real estate. After recently handling the sale of real estate from several beneficiaries under a will, I think it will help to provide a more basic analysis of the process.
Basic Foundation: In Virginia, if the person died intestate (without a will) or testate (with a will) then the real estate passes directly to the heirs at law or directly to the beneficiaries under the will. What does that mean? Here’s an example: Suzie dies (after her husband’s death) leaving behind her three children: Ashley, Betsy and Johnny. Suzie has a will that leaves her house equally to her three children. The three children immediately receive equal ownership of Suzie’s house upon Suzie’s death. The children do not need the Court or Executor to transfer the property to them – the property passes directly. What if Suzie did not have a will? The EXACT same thing.
Selling the Real Estate: This is where things become a little more complicated. First, look to see if the Executor under the will was given power or authority over the real estate. This may be in the specific language of the will or by incorporating VA Code § 64.2-105 (previously VA Code § 64.1-57). If the Executor has authority over the real estate then take a look at my previous posts (PART I and PART II) regarding the Executor’s level of authority. If the Executor was not given authority over the real estate, then the beneficiaries hold the authority and can sell the real estate without the Executor’s consent.
Who Executes the Deed: The Executor must execute the deed IF he clearly has the authority and direction to sell under the express terms of the will. The heirs or beneficiaries must execute the deed if the person died without a will or if the will does not give authority and direction to the Executor to sell the real estate. BOTH the beneficiaries and the Executor should execute the deed if the Executor is given authority over the real estate but is not given direction or clear instructions.
Debts of the Estate: Under VA Code § 64.2-532, if a person’s estate does not contain sufficient assets to pay debts and demands of creditors then the real estate will be used for payment of the person’s debts. Debts and demands must be made within one year of a person’s death. Therefore, the real estate that the heirs or beneficiaries receive may be subject to debts of the estate for up to one year. The heirs or beneficiaries might be required to post bond or escrow any proceeds from the sale of real estate during this one year period. Practically speaking, you may have to wait one year to receive any money from the sale of the real estate.
How to Make this Easier: The use of a Revocable Living Trust makes the transfer and sale of real estate much easier. Check out our previous blog post entitled “What is a Living Trust” by clicking HERE.
The transfer and sale of real estate after death can be a complicated process. Be sure to enlist the guidance and help of an experienced attorney in this field.