For people just getting into probate investing it is easy to get confused by all the legal terms such as probate, decedent, intestate, testate and executor just to name a few. It took me a while to figure these out and when I did, it really helped me understand what I was dealing. This series of posts called “What Does That Word Mean” is designed to explore the terms one at a time and in a way where the average person can understand.
Today’s Word: Testate
Dictionary Definition: Having left a valid will (from merriam-webster.com)
Used in a sentence: My father’s best friend died testate.
When someone passes away they either have a valid will (testate) or they do not have a valid will (intestate). When a will is left behind is it is the guiding source in how the assets of an estate are distributed. The will also names the executor (or executrix) who becomes the representative for the estate and will carry out the words of the will. That is why it is so important for someone to create a will and keep it current with your assets. When a will is not present, it means that the assets will be distributed by the laws of intestate which vary from state to state. These laws follow a set formula and in almost all cases will only distribute assets to kin.
As it Pertains to Probate Investing
For a probate investor it’s a good idea to understand when a case is testate. The reason is because that person is in charge of the estate and is the one we want to direct any communications to. When a will is present that person is referred to as the Executor (male) or Executrix (female). While looking through the probate files at your county courthouse you’ll see a reference to the name and address of the Executor/Executrix. Probate case files that contain no will and are said to be intestate, will have someone referred to as the administrator. This person was appointed by the court to act on behalf of the estate and has the same powers as an Executor except they will follow the laws of intestate to distribute the estate assets.
Knowing if an Executor or Administrator is in charge is helpful information as many times an Administrator could be a lawyer or a family friend. In such a case the person does not have the same attachment to any potential property and might be looking for a quicker sale. This could give you some bargaining leverage. But, keep in mind that an administrator must get approval from the courts in order to make sure the sale of the property is in the best interest of the estate. In many cases this could kill an agreed to sale.
From speaking with other probate investors, it seems that it’s easier to deal with Executors then Administrators but that shouldn’t stop you from going after both.
Should I Really Worry About This?
It is not really necessary to know if a probate file is Testate or Intestate, but it can be helpful information. If you are dealing with a property that has already been inherited then just treat it as if you were buying a run of the mill house. The complete ownership has been transferred and the estate/government no longer have a say as to selling price. However, if the probate process has not been completed yet, be prepared to jump through a few hoops (like getting the house released from the estate) before purchasing it.
This is my understanding on how this part of the probate process works. Please correct me if I’m wrong or add some of your experiences when dealing with testate or intestate files.
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