How to sell estate property in Massachusetts (Part 1 of 2)

​Read Part 2 Here

​How to sell estate property in Massachusetts - A guide to help you through the process

People, including heirs, often ask me what they need to do to sell the real estate that they have inherited after their parents have passed. It’s an emotional time, making the logistics of estate management, determining what to do, or how to sell the home seem daunting.  Often the heirs, beneficiaries and the Personal Representative (PR) of the decedent’s estate are left with multiple questions regarding:  

• The title of the estate
• How to handle the sale when there is/isn’t a will
• Can estate funds be used to clean/improve the property
• When can the home be sold
  
  

Most, if not all, of these questions can be answered with proper estate planning prior to death; Even with a proper estate plan in place, there can still be confusion as to the process of selling real estate.

The process of selling an inherited home is confusing enough in Massachusetts, but changes to the law in 2012 have made matters worse.  I will help answer these questions and I will tackle the basics of what needs to take place to sell real estate after a decedent’s death in both intestate (without a will) and testate (with a will).  These blogs may help guide you, but cannot replace the expertise of a knowledgeable REALTOR, estate attorney, and a CPA with experience in this realm.
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I have been fortunate to have worked with and be able to interview an expert Estate Planning Attorney, Paul Brigham of Brigham & LaMountain, located in Framingham, MA. In our discussion about the complexity of estate liquidation, he said something that rings true,  

“The types of probate we initiate now have changed from what they were before - there are different levels of complexity, different levels of court involvement – even if you speak to people at court , most people don’t know what form is supposed to be filed.” 

This speaks volumes about how difficult it can be to sell real estate as part of an estate resolution, but I will break it down to help heirs and Personal Representatives have a better understanding of the process.  

What if the decedent didn’t have a valid will? 

•  Definition of Intestate: One who, having lawful power to make a will, has made none, or one which is defective in form. In this case the estate passes under state laws of descent and distribution.
  
  

Important note: HEIRS are generally related to a decedent by blood, adoption, or marriage. By contrast, a DEVISEE can receive property from a decedent simply by being designated in the decedent's will and does not necessarily have to be related to the decedent.

If the decedent died without a will the petitioner may represent the estate as intestate. The general rule is that process must be commenced (i.e. “filed”) within 3 years of a decedent’s death.

In this case, the title of the real estate transfers automatically to the heirs of the decedent.  Heirs at law are those individuals who are entitled by statute to the decedent’s property when there is no will or when the will does not dispose of all assets. Form, MPC 162, must be completed, often by an heir, to identify a decedent’s surviving spouse, children and heirs at law as of the date of the decedent’s death.

When there is no will, the court may be petitioned by creditors, friends, or family to initiate the Probate Process and to appoint a Personal Representative (PR).  There are legal steps taken to accomplish this and the amount of time depends on the complexity of the estate.  Smaller estates can take weeks to months and bigger, more complicated estates can take several months to a year – that is, if there are no objections. Once appointed, the PR only has the authority to sell real estate for the purpose of paying debts (i.e., the mortgage).  Otherwise, the heirs of the estate must decide how and when to sell the real estate.

Practically speaking there is a time that no one is in charge – legally.  Lineal decedents of the deceased are the primary heirs of the estate but a PR is not appointed until the court has been petitioned.  If there is only one heir, that person is likely to be appointed the PR and the process usually takes 30-90 days after the petition is filed.

Typically, someone steps up and takes responsibility for the real estate while the legal end of it is worked out. After all, someone should confirm that the home is secure, that the heat is on, or that the property has been winterized to prevent any damage to the property during the colder months.  

It is important to note that during this time, the only evidence of the new owner(s) is sitting in the registry of probate.  There is no record at the registry of deeds as to the current ownership; the decedent’s name remains.  A deed of distribution gets recorded and the PR files an acknowledgement as to who the heirs are but a probate court makes a final determination in a formal proceeding.

Unfortunately there are differing forms of probate administration and again, this is why I recommend the use of an experienced estate attorney. Whether under the formal or informal process the court must be petitioned for a license to sell real estate after there is an offer pending from a potential buyer.  The agreed purchase price is an essential element for the license to be granted and the license is granted for a fixed period of time, but usually sufficient to conduct the sale of real estate.

It is best if the heirs and the PR are able to come to a consensus as to how to handle the disposition of the real estate.  If there is no consensus by the heirs, the PR (or another petitioner), may be forced to seek probate-court assistance to sell real estate from the estate. When the property has an accepted offer, a Notice of Proposed Action is mailed to all heirs, simply stating the terms of the proposed sale. The heirs have 15 days to review the notice and pose any objections. If there are no objections, the sale may proceed without a court hearing.

What happens if the decedent has a valid will?

• Definition of Testate: The decedent has a valid will.
  
  

In Massachusetts, for the will to be valid it needs to be signed by two witnesses and should be self proving, meaning that it should be notarized.
If the decedent died with a will and the petitioner is offering the decedent’s last will for probate, the petitioner may represent the estate as testate. The petitioner must state on the Petition:

1. the date of the decedent’s last will and any codicil(s); and 
2. that the will submitted for probate is the original will or for an ancillary probate proceeding, that the will is an authenticated copy of a will probated in another jurisdiction and is accompanied by proof of its probate.

In a will, there is usually a nomination of who is going to be the Personal Representative (PR) and who is going to receive the real estate, known as heirs or devisees.   The will may grant the PR the authority to sell the real estate – if so, the PR does not need to petition the court for a license to sell the real estate.

Who are Devisees?
Devisees are persons, entities, charitable organizations, or trusts designated in a will to receive the Decedent's personal or real property. In the case of a devise to an existing trust or trustee, or to a trustee or trust established by the will, the trust or trustee is the devise. The beneficiaries are NOT devisees. For all cases (informal and formal) seeking to probate a will, Form MPC 163 must be completed to identify a decedent’s devisees.

• Recent Legislative Change: added language to clarify that a PR appointed formally or informally may sell real estate pursuant to a power contained in a will or by license to sell.
  
  

In most cases, the decedent’s will names a PR who is designated to handle the distribution of assets, but does not automatically include the authority to sell real property. If the will does not give the PR authority to sell the court must be petitioned for a license to sell real estate.  If the heirs of the estate are in agreement they have the authority to list and sell the property but the sale cannot proceed until the heirs have been identified and agreed by the court. If the heirs do not agree to sell, a complaint to partition the real estate must be filed. If the will does grant the PR the power to sell real estate, no separate petition to sell real estate is required in a formal process. 

Learn more about the MUPC: MUPC Administration Procedural Guide Second Addition

In my upcoming blog, Recommendations for Selling an Inherited Home, I discuss the distribution of personal property, recommendations for selling inherited homes in Massachusetts, whether or not you can make improvements to the home before sale, how to sell the home quickly, and the risks and pitfalls of selling an inherited home.

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Paul L. Brigham, an attorney and accountant, has over 30 years specializing in the areas of tax, trust and estate administration and financial consultation.  His clients include numerous multi-generational family relationships and closely-held business owners in the New England region.  Mr. Brigham is currently a member of the Probate, Real Estate and Tax committees of the Massachusetts Bar Association, a member of the Boston Estate Planning Council, a member of the Society of Trust and Estate Practitioners, and a member of the Real Estate Bar Association for Massachusetts.  He can be reached at 508-628-3500.

John Agostinelli is the co-author of Easy Money and the American Real Estate Ponzi Scheme, and is a recognized authority in real estate. John is a real estate investor, broker, industry consultant and housing policy commentator.  His market focus is the Boston MetroWest area.
 
He services: Ashland, Dover, Framingham, Holliston, Hopkinton, Marlborough, Medfield, Medway, Milford, Millis, Natick, Northborough, Sherborn, Southborough, Sudbury, Wayland, Westborough, Upton
 
John has helped hundreds of investors, buyers and sellers, sell, purchase or invest in real estate in over 50 Massachusetts towns. Please contact him via email at john@agostinelli.com or by phone at 508-283-4958.

Other helpful articles/books worth reading:
http://www.easymoneyinamerica.com/
https://bostonagentmagazine.com/2015/01/19/the-short-list-john-agostinellis-tips-for-understanding-todays-financing-landscape/
http://www.gmnews.com/2016/08/11/housing-peaks-and-valleys/
https://www.amazon.com/Money-American-Estate-Ponzi-Scheme/dp/1633933334​