Heir Property: Conveying Title
All of us are seeing a steady increase in transactions that include heirs or devisees of an estate. These closings require more work to ensure title is properly conveyed, and title companies have additional requirements when property is passing through a decedent’s estate. At The Law Group, we have a systematic process to try to address estate complexities.
Upon death, real property is vested in the decedent’s heirs. If a will is probated, then property is vested in the devisees, and vesting relates back to the decedent’s date of the death.
The primary concerns to be addressed prior to closing are:
Who must sign the deed;
What estate claims must be paid and if the expenses have been paid and released; and
Whether the assets have been properly distributed to the heirs.
If the estate is properly closed, then only the heirs or devisees (along with spouses) need to sign at closing.
If the estate has not been probated or if the estate is open, additional concerns must be addressed. For example, if the decedent died within 2 years, then an estate should be opened, and a notice to creditors needs to be published. The executor/administrator must sign the deed as well, and most title insurance companies will also require that the executor/administrator and the heirs/devisees provide an open estate indemnity agreement. See N.C. Gen. Stat. § 28A-17-12(a)(2)
There are a few cases when the executor/administrator can convey the property without joinder of the heirs/devisees:
If authorized by the clerk of court, the executor/administrator may sell the property without the joinder of the heirs/devisees. The executor/administrator must file a special proceeding to petition the clerk to sell the real property to satisfy the claims against the estate.
If the will contains a specific devise of the real property to the executor; or directs the executor to sell the land and distribute the proceeds to the devisees; or the will gives the executor the power to sell and the will devises the real property to the estate.
If there is a contract to sell the real property prior to the decedent’s death. See N.C. Gen. Stat. § 28A-17-9.
If the estate has not been probated and if the decedent died more than 2 years ago, many title insurance companies may accept other proof of the decedent’s heirs (such as an affidavit from a disinterested third party familiar with the decedent and the family). However, these situations are considered on a case by case basis and should be addressed early in the closing process.
This is by no means an exhaustive list of the issues that may arise with an estate. Please reach out to The Law Group with any questions or concerns you may have with any particular real estate transaction. We would be glad to assist you! RealEstate@LawGroupNC.com