How You Can Pay Debts By Selling Assets During Probate
When someone dies, their estate can be taken through the probate process, which mainly involves authenticating a decedent’s will, appointing an executor, and paying off any remaining debts. The total number of young adults who have created a will or estate plan has increased by around 63% in 2021, which goes to show that people of all ages are starting to recognize the importance of properly preparing an estate. In the event that an estate has numerous debts that need to be paid, there’s a possibility that you could sell some of the estate’s assets to pay off any debts that remain.
When You Can Sell Estate Assets
In most cases, selling assets is only necessary if creditors are seeking payments on debts that the estate still owes. However, these assets may still need to be sold if the government seeks to acquire a piece of real property through eminent domain. While you may be able to sell specific assets when attempting to pay for outstanding debts, it’s much more common for real estate properties to be sold to cover these debts.
Tasks That the Estate Executor Must Perform
When an individual becomes the executor of an estate, they are required to complete tasks in a certain order. First, every asset that makes up the estate will need to be gathered together. All remaining debts must then be settled. The only way for beneficiaries to receive the inheritance that is laid out for them is for the debts to be paid beforehand.
When an estate is settled, this indicates that every creditor has been paid, the decedent’s remaining expenses have been paid, and taxes have been filed. When a proper estate plan is made with the assistance of a reputable attorney, it’s possible to provide for every expense, which makes it easier to avoid selling off estate assets.
In other situations, proper planning won’t account for all debts and expenses because of a lack of immediate funds. In these situations, it may be necessary to sell assets and property to cover the remaining debts. The executor who is set to manage the estate during probate will take care of all of these tasks.
What Takes Place After Assets Are Sold?
In the event that the executor needs to sell assets to cover remaining debts, the executor could benefit from hiring an attorney. These professionals understand how to gather and fill out the paperwork needed to complete such a sale. Before selling a property, the property will need to be officially appraised, which is a process that allows the current value of the property to be identified.
From here, the property will be sold in probate. The price the property is sold at must be at least 90% of the final appraised value. When a potential buyer makes an offer on the property, it will be sold in probate once the seller accepts the offer. The probate court must then approve the sale.
After the sale of the property has been approved by the court, all heirs will receive a notice of the sale that includes the date that the sale is supposed to be finalized. Every heir will have around 15 days to make an objection to the court. If an objection isn’t made, a bidding process may take place among the buyer and other individuals.
Whoever makes the highest bid will typically be given the property. When a property is sold to cover debts, it’s very common for some money to remain from the sale of the property. This money will be distributed evenly to each heir who was named in the decedent’s will.
How Our Estate Planning Litigation Lawyer Can Help
If you believe that a creditor isn’t actually owed money or that the property that’s up for sale shouldn’t be sold, you may want to have a New Jersey estate planning litigation lawyer by your side to help you navigate the process that occurs when making an objection. The probate process can be time-consuming and complicated. However, our reputable and trustworthy lawyers have the experience needed to help resolve disputes and determine what your best legal options are.
If you have questions about the probate process or would like to take legal action during this process, call our Hackensack, New Jersey, estate planning litigation lawyers today at (201) 996-1200 to schedule a private consultation.