Detailed Answer
In California, real property titled solely in a decedent’s name generally must pass through probate before its value can be used to pay estate debts. Below is a step-by-step overview of how to bring real property into the probate estate and convert it into funds for creditor claims.
Step 1: File a Petition for Probate
The first action is to file a petition in the Superior Court of the decedent’s county. Under Probate Code § 8000, you request appointment of a personal representative (executor or administrator) to manage estate assets.
Step 2: Appointment of Personal Representative
If the decedent named an executor in a valid will, the court issues Letters Testamentary. If there is no will, the court appoints an administrator and issues Letters of Administration.
Step 3: Inventory and Appraisal
Within 60 days of appointment, the personal representative must file an Inventory and Appraisal of all estate assets, including real property. This is required by Probate Code § 8800. A probate referee or county assessor appraises the fair market value.
Step 4: Notice to Creditors
The estate must publish a Notice to Creditors and mail individual notices to known creditors to allow them to file claims. Creditors have four months from the date Letters are issued to submit claims per Probate Code § 9100.
Step 5: Petition for Sale of Real Property
To liquidate real estate, the personal representative files a Petition for Sale under Probate Code § 10300 et seq. The petition describes the property, proposed sale terms, and demonstrates that sale is in the estate’s best interest.
Step 6: Court Order and Sale Procedures
After a hearing, the court issues an Order for Sale. The representative must give 15 days’ notice of the sale hearing to interested parties and publish notice of sale as required by statute. If overbids occur, the estate may secure a higher price under the bidding procedures set forth in Probate Code § 10305.
Step 7: Confirming Sale and Transfer of Title
Once the sale closes, the personal representative files a Petition to Confirm Sale. Upon confirmation, title passes to the purchaser and sale proceeds become estate funds.
Step 8: Payment of Claims and Distribution
With funds in hand, the personal representative pays validated creditor claims in order of priority (administration expenses, secured claims, unsecured claims, etc.). Remaining assets are distributed to beneficiaries under the will or California intestacy rules.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed California attorney to address your specific circumstances.
Helpful Hints
- Review all property titles early to determine probate requirements.
- Consider homestead or spousal property exemptions under California law.
- Obtain at least two appraisals for high-value real estate.
- Track creditor claim deadlines carefully to avoid personal liability.
- Use a probate checklist to ensure compliance with court timelines.