The One Where the Seller Dies Before Closing
Selling a property owned by someone who has passed away is coming up a lot more frequently because land that has been in families for generations is now being sold by the younger generation. Who can blame them when the value of that land is so much greater than it once was?
You have been asked to list the property for sale. When the owner has passed away, we usually get a call from our agent asking who signs the Purchase and Sale Agreement? Hywater Title loves these questions and takes every opportunity to educate our clients on things that affect their business. If there was a Will or a Trust that designated who was supposed to receive the property, then the signatory on the selling documents is easy: the Executor/Executrix or Trustee. Woo hoo!
What if the owners of the land did not have a Will or Trust? After all the debts are paid, Tennessee Law kicks in to determine who now owns the property (T.C.A. §31-2-101). It goes to the heirs-at-law! The law is very specific on which heirs own a share of the property and the law is very strict about how to prove who gets a share. Example: If grandpa and grandma had 3 children and all 3 are still alive, the chain of ownership is relatively easy to prove. Without a will, it’s likely the three children would inherit the property in equal parts.
BUT what if grandpa and grandma died 30 years ago, had 7 children, but 3 of those children predeceased their parents,, and all of the 7 children had children of their own, two of whom have passed away? What if some of the heirs are out of state because there was a rift between siblings? Yep. Exactly. Things can get….. complicated.
In order to figure out who owns what and in what share, the court requires the heirs to provide a document called “Affidavit of Heirship.” And the law requires that two separate people submit these Affidavits. In our example, this Affidavit is a statement as to who are the heirs of grandpa and grandma. are.
Usually the seller’s agent is the person who gets tasked with trying to figure out not only who the potential heirs are. Hywater Title tries to simplify this process for the agents by providing them with helpful forms and advice. Agents: you are NOT in this alone!
So, what is the takeaway? Talk to your clients about having an estate plan in place. It’s never too early or too late!
