It Need Not Take Years to Complete Probate
Ethan R. Okura
Hawai‘i Herald Columnist
Sometimes the sale of a house, condo or vacant lot is delayed because of probate problems. The need for a probate does not have to stop a real estate sale. In this month’s column I will explain what you and your real estate agent need to know so that you will be able to sell property quickly even if a probate is necessary.
First, let’s discuss some of the basics of probate.
The person who died is called the “decedent.” Probate is a court proceeding that is required to transfer title to (which means ownership of) property if the decedent owned assets in his or her name alone, without a beneficiary named. If the decedent owned real estate as a “joint tenant,” or “tenant by the entirety,” or in a revocable living trust, no probate is necessary. However, if the decedent owned real estate in his or her name only, or as a “tenant in common,” in Hawai‘i, a probate is required no matter how small the value of the real estate.
Sometimes a person hires a real estate agent to sell property, not knowing that a probate is necessary. The real estate agent finds a buyer. Escrow is opened. The escrow company orders a title search. The title search shows that someone who used to own the property died, and that a probate is necessary. The real estate sale is stopped. The sale cannot be completed until a lawyer is hired to begin a probate in court. How long will it take before the sale can be completed? Many times, the sale can be completed within two to six weeks. This is a surprise to many people, because most people know that probate take one year or longer.
It is true that probate usually takes a minimum of six to eight months to complete. Oftentimes, it takes more than a year. However, in order to sell real estate that is in probate, you do not have to wait until the probate is completed. The real estate can be sold as soon as the “personal representative” is appointed by the court. The “personal representative” is the person who is appointed by the court to be responsible for the affairs of the person who died. The personal representative’s job is to gather the assets of the person who died, pay the bills and then distribute the property to the persons who are to inherit the assets. When someone hires our law office to do a probate, we can usually get the court to appoint a personal representative within six weeks or less. If the beneficiaries or heirs agree to the sale, the real estate can be sold at that time. If any of the beneficiaries or heirs disagrees with the sale, then there will have to be a “confirmation hearing” in court, which will delay the sale of the property.
If all of the assets owned by the decedent are worth $100,000 or less, then it is possible to have the Small Estates Division of the Circuit Court handle the probate, without an attorney. However, the Small Estates Division does not like to get involved in the sale of real estate, and you would probably have to wait six to eight months or more before the property could be sold. By hiring your own private attorney to do an “Informal Probate” instead of a “Small Estate” proceeding, you may well be able to sell real estate in six weeks, instead of having to wait six to eight months or longer.
If the decedent lived on the U.S. mainland but owned property in Hawai‘i, sometimes a probate was already done in the state where the decedent resided. In that case, if we get certified copies of the mainland probate papers, we can use a special procedure called “Acknowledgment of Authority.” With this procedure, we can often get the personal representative authorized to sell the real estate in Hawai‘i in two to three weeks, instead of six weeks.
Probate does not have to delay the sale of real estate for months or years.
© OKURA & ASSOCIATES, 2021
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Ethan R. Okura received his JD from Columbia University in 2002. He specializes in Estate Planning to protect assets from nursing-home costs, probate, estate taxes and creditors.
This column is for general information only and is not tax or legal advice. The facts of your case may change the advice given. Do not rely on the information in this column without consulting an estate-planning specialist.
