Selling a Decedent’s Real Estate in Tennessee
Authority over Real Estate
As personal representative or executor of a decedent’s probate estate in Tennessee you may have authority over the real estate. Before taking action you should first consult with your attorney to determine whether there are any limitations to your authority.
Sometimes the executor has full authority over real estate, but often the executor’s authority is limited. Usually, the executor is authorized (but not always required) to pay for reasonable, routine upkeep of real estate for up to four months after the decedent’s death. This includes payment of utilities, maintenance, lawn service and insurance premiums. This does not include mortgage payments, real estate taxes, major repairs or other extraordinary expenses. In Tennessee, the beneficiaries are responsible for these items, unless the decedent’s will states otherwise.
If there are plans to sell the real estate, your attorney must determine whether the executor is authorized to do the following: 1) Hire a real estate agent; 2) List the real estate for sale; 3) Enter into a contract to sell the real estate; or 4) Close on the sale of the real estate. Sometimes, these actions require consent of the beneficiaries or the probate court.
Sale of Real Estate after Decedent’s Death
In Tennessee, real estate cannot be sold within 60 days of the decedent’s date of death. It is also advisable to wait to sell it until the period for creditors’ claims has passed. If the creditors’ claims period has not passed prior to the sale of real estate, the title insurance company may be required to hold the proceeds from the sale in escrow pending confirmation that all debts, taxes and other estate obligations have been satisfied.
For the title insurance company to provide title insurance, usually the following criteria must be met:
- The estate must be opened with the probate court
- The estate must have an EIN
- The estate must obtain a TennCare Release
- The estate must obtain an Inheritance Tax Release
As part of the administration process, your attorney will help you open the estate and obtain the other items mentioned above.
If the estate is insolvent the executor will need to obtain approval of the probate court before hiring a real estate agent, listing the property for sale, entering into a sales contract or closing the sale. Let your attorney know as soon as possible if you anticipate that the decedent’s estate to be insolvent.
It is important to engage the right professionals to help you complete the sale. Both the realtor and closing agent should be familiar with the requirements of selling real estate owned by the estate. While you are not required to use your estate attorney as your closing agent, if your estate attorney’s law firm provides real estate closing services it may benefit the estate for the following reasons:
- They are already knowledgeable about the estate.
- The estate can avoid duplicating efforts and costs such as those associated with compiling and providing information concerning the estate assets, obligations, beneficiaries, and the status of the estate administration and providing documents required for the closing, including but not limited to the EIN, TennCare Release and Inheritance Tax Release
Rob Hazard is an attorney and CPA with GSRM. GSRM’s attorneys routinely handle estate administration and real property matters throughout the entire state of Tennessee. If you are seeking legal or other professional advice, we encourage you to reach out directly to us – after you have fully read and understand our disclaimer.