Selling A House In Probate

This blog post answers the question of applying Nevada probate law.

Our firm is frequently asked about selling a house in probate in Nevada, or said another way, can an executor sell a house in probate?  In short, the answer is yes. The proper question is: how do you sell a house in probate? The answer will then help determine how long a probate takes in Nevada and what are the costs.

At the start, the reader must understand there essentially are four (4) levels of probate in Nevada. Levels in this regard generally refer to net value of property deceased left behind subject to some probate procedure. General and summary administrations levels are discussed in this blog post.

The lowest two levels, while addressed in the probate chapters under the Nevada Revised Statutes, are not considered a probate because no property is being administered under the supervision of the courts. The lowest two levels are “Affidavit of Entitlement” and “Set Aside.” The lowest, affidavit of entitlement, is appropriate where the deceased leaves personal property with a value of up to $100,000.00 for a surviving spouse, and $25,000.00 for everyone else.  There are some exceptions of personal property, but is not discussed here because both are outside this scope of this blog post.  The next level, set aside, can include real property so long as the net value of all property does not exceed $100,000.00.

In a general or summary administration, an executor (an antiquated term) now known as “Personal Representative” has authority to sell property in probate. Once a court has appointed a Personal Representative and have issued Letters Testamentary (the deceased died with a will) or Letters Administration (the deceased died without a will), the question is, what is the structure of the estate?  In other words, does the Personal Representative have authority to administer the estate under the Independent Administration of Estates Act? If so, a lot of time, costs and legal fees can be saved. If not, more procedures and appearance before the Court will be required, and thus added costs and legal fees will be incurred.  This also likely will increase how long the probate will take and will add time the court appointed Personal Representative will personally have to spend.

Here is why. Administering an estate under Independent Administration of Estates Act allows the Personal Representative to sell a house without first publishing notice and then waiting 10 days (actually 2 weeks when coordinating publication in a local newspaper) before the sales contract can be signed, and then again waiting for a hearing to confirm the sale. As of the date of writing this blog post, the Clark County (Las Vegas, Nevada area) Probate Court are setting matters 6-7 weeks out. If you add one week for the time to draft, obtain personal representative’s signature, and file the petition to confirm the sale, plus two weeks to publish the sale, and wait the 6 to 7 weeks, just to sell a house could take 9 to 10 weeks (2 to 2.5 months) to obtain a court confirmation hearing.  In addition to the time it takes to get a court confirmation, Personal Representative will personally have to spend time coordinating the sale and meeting other requirements under the Nevada Revised Statutes like assembling, filing and publishing to interested parties an Inventory, Valuation and Record of Appraisal.

In contrast, authority under the Independent Administration of Estates Act allows the Personal Representative to sell a house in as fast as 18 days after giving notice to interested parties (heirs or devisees). If no objection is timely received, the Personal Representative can close on the sale of a house. No court confirmation required. Time saved over sale by court confirmation is 7 to 8 weeks.  The personal representative does not have to appear at the sale and was able to save other personal time. Finally, estimated legal fees and costs of $3,000.00 will be saved. Be that as it may, just because no court confirmation is required, that does not mean you still should not report the sale details to the interested parties before the close of the probate.

To this point in this blog post, time was discussed revolving only the sale of a house in probate. In a general and summary administrations other procedures are required that take time. For example, notice to creditors must be given adding 60 days to a summary administration and 90 days to a general administration.

So the question still unanswered is how long from start to finish does a summary and a general administration take? Based upon the author’s 20 plus years of experience in probating estates in Nevada, the average summary administration (assuming no matters occur outside the Ordinary Course) takes around 7-8 months. If you have to confirm a sale of a house or other real property, add at a minimum another month.  General administration takes around 8-9 months. A sale of a house or other real property should not add time to close a probate because the waiting time to obtain a court confirmation of sale or property is less than other time requirements and can be accomplished at the same time.

Next, as of the date writing this blog post, the average estimated costs (court costs, publication costs, copies, postage) of a probate, whether summary or general, in Nevada is $1,000.00 plus or minus.

Finally, the legal fees question. Why don’t attorneys publish their legal fees? There are two main reasons: 1) Nevada State Bar Rules, and 2) no economic value.  The details of the State Bar regulatory requirements revolving publication could be a blog post alone that are not relevant to the scope of matters discussed herein. What can be said is the rules are cumbersome, and thus is the coup de grâce where price publication is not competitively viable.

The other reason is economic value. This gets down to where the attorney is in the market. The attorney who knows his/her true value does not have to post their price. They know people who call them for help is ready to pay, and in exchange will receive competent and fair value.

The other attorneys lack one or both (value given, and client confidence value will be received). In this author’s opinion a significant number of attorneys lack both. A few lack one. At this point you may not care, you just want the price. If so, stop  – do not waste your time reading further.

Attorneys at some level understand the dynamic of what is going on in the heads of the public:

• They generally do not have sufficient understanding of all that is involved in a probate,
• They do not know how to determine the qualifications of an attorney,
• They have the basic attitude that probate is an unpleasant necessary evil following the death of a loved one, and
• The perception there is a plethora of attorneys and thus are hungry.

All of the factors mix to create the perfect storm of commoditize probate assistance!

If you are evaluating an attorney in this area, watch out for what you get. You may save a thousand or two with a pleadings-mill-house, but lose the same or more in federal income taxes for not properly and timely claiming tax positive elections or structuring the probate to claim deductions many attorney’s do not know exists. Attorneys in pleadings-mill-houses care only about completing the minimum requirements of Nevada law.  Since a significant majority of attorneys are not CPAs, nor hold LLMs in tax, they likely are not qualified to advise, let alone implement tax savings in the probate. Non-legally trained CPAs must rely upon the probate attorneys to provide information to preparing estate income tax returns and accountings. A loss of translation likely occurs in many cases.