Q: My mother in law passed away, can the executor of the estate transfer the deed of her house to my husband before closing
My mother in law estate still in probate, but my husband wants the house. Can the deed be transferred to or can we buy it for a specific amount below market value before estate closes?
A:
The Personal Representative will usually need to wait until the time period for creditor claims passes before distributing the estate. This does not necessarily mean waiting until the estate closes - in some situations a PR will file an interim account and make a distribution before the estate closes.
The law sets a priority for distributing. Things like taxes, funeral expenses and valid claims all need to get paid before assets go to heirs. Either distributing outright or allowing someone to purchase below market value could, in some cases, work a fraud on creditors and would allow these priority holders to come after the heir for assets improperly distributed. Because an estate deed to an heir has no transfer and recordation tax but a "for consideration" deed does (even if going to an heir), it would make little sense to offer any money for property that will be inherited.
That said, once the time for asserting creditor claims has passed and assuming the estate is solvent (meaning it has enough assets to pay claims and make distribution), the PR can do any deed of distribution.
The above offers a summary of general legal information and doesn't take the place of getting independent legal advice. Even if a PR elects to handle an estate without full legal representation they may wish to contact an attorney to help prepare and file any deed of distribution.
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