Don’t Wait to Sell that House
In ancient days, 25 years ago, many title insurance underwriters believed that an executor (personal representative) needed to get past the creditor period (3 months) before he or she could validly sell real property owned by a decedent.
Those days are gone and for non-homestead property, all an executor needs is either an order approving the sale or the express power to sell stated in the Last Will.
But for homestead property, which is sold by the heirs and not the executor, getting the universally-required Order Determining Homestead Status can be a challenge before the creditor period ends. Many judges don’t want to enter the order before the window for potential creditors has closed, even though in 99% of the cases there is no real basis to question the homestead status.
Does that mean the sale of the homestead must wait until the creditor period is over? Not necessarily. It means the personal representative’s attorney needs to convince the judge that all potential creditors are protected in the event they file at the last minute and want to challenge the exempt status of homestead. This is where creativity and experience can come into play, and the willingness of the heirs to hold the net proceeds in escrow for a while rather than lose the sale. Since no one can be sure when the next buyer will come along, everyone usually agrees to move forward with the sale, even if the distribution of the funds to the heirs must be delayed.