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Whether that occupant has to move is situation-specific and depends on many factors.
The estate’s personal representative has a fiduciary duty to the heirs, beneficiaries, and creditors of the estate. A fiduciary duty is the highest duty under the law and requires you to:
The duty owed by the personal representative to the heirs would also include maximizing the value of the assets. That might entail making those assets productive, or income-producing.
At the same time, while the personal representative has statutory and ethical duties, the courts also have policy goals, primarily to give effect to or carry out the intent of the deceased (the “testator”).
If someone is living in the deceased’s home, you need to determine whether they are a spouse or another beneficiary to whom the house is left. The heir or beneficiary may have rights to the home. All of that would depend on the way the estate and the deed were set up. The first inquiry is whether the house is under a lease agreement that may bind the estate through the end of the lease. That determination will depend upon the terms of the lease.
The second inquiry would be whether the house was left specifically to the spouse (which it usually is) or another heir or beneficiary. If it was, the person to whom the house was left has a right to it. If it was not left to someone specifically, then it falls into the “residuary estate” to be divided among the residuary beneificaries. In that case, there may be a technical duty to make the home productive or income-producing by charging them rent.
At the same time, houses are much more secure when people are occupying them. In rural places, many dwellings can’t be seen or watched by neighbors. In those situations, it’s not uncommon for the beneficiaries or heirs to want someone living in the house to ensure the pipes aren’t freezing and no one’s trying to break in. In such cases, an arrangement may be worked out with the occupant, who is usually a family member, to continue living there. However, at the end of the estate, the value of the house will have to be divided among the beneficiaries, so the person will need to leave at the appropriate time.
The way the deed is set up often dictates whether that property is part of the estate. If it’s evident from the face of the deed that when the decedent dies, it passes to someone else, then it’s not an asset of the estate. In such cases, an Affidavit can be filed at the County Recorder’s office, effectively transferring the property to the person(s) to whom it is supposed to pass.
If the property does pass into the estate, we have to determine if it is specifically given to someone in the will or just part of the residuary estate to be divided among all heirs (where no will) or residuary beneficiaries (in the case of a will). If the person living in the home is the one who is supposed to receive it, then arrangements can be made to transfer title to that person after the claims period has passed and all claims are paid. If ther person living there is not specifically given the house under an estate plan, there are two options. Either the person moves so the house can be sold, or the person living there reaches an agreement with the heirs to purchase or rent the property.
Heirs technically aren’t directly responsible for the mortgages, taxes, or utilities. Indiana’s probate estate law does state that upon your passing, your assets, both personal property and real estate, technically vest immediately in the heirs of the estate or beneficiaries under the will.
However, your assets are subject first to possession by the personal representative to take care of certain legal formalities, such as payment of claims, and satisfaction of the marital share and marital surviving spouse allowance.
While the title is possessed as part of the estate, the estate is responsible for continuing to pay the mortgage, taxes, utilities, and insurance. Because the personal representative has a fiduciary duty to the heirs, these payments should be handled as expeditiously as possible. Because that means there will be less estate to divide up among the heirs, the heirs do end up paying those things indirectly. It just does not have to come out of their pocket.
Until the estate can get established and get access to liquid funds to pay things, it may be that an heir personally covers certain payments to avoid late payment penalties or default. If that happens, the individual making payments on behalf of the estate for the benefit of all can seek reimbursement from the estate once sufficient liquidity has been established to do that.
The personal representative has a duty to identify, gather, secure, and protect/insure all the assets pending the estate administration. That includes the home, which is a significant asset. Therefore, no one should be making any modifications or renovations to the home.
Generally, the home would remain vacant, but there are instances where it may be rented to generate income or occupied by an heir or family member to enhance security. However, in such temporary arrangements, there should be no incentive for anyone who occupies the house to incur the costs of investing in permanent renovations or remodeling.
If an occupent does make repairs or renovations, it would generally indicate that their occupancy isn’t temporary. In that case, you need a legal resolution as to any conflicting assertions of rights to the home.
Attorney Thomas Scifres is a skilled lawyer based in Salem, Indiana, who has helped clients like you navigate the intricacies of probate law. With more than three decades of experience, he is prepared to assist you in understanding your rights and obligations regarding property during the probate process.
Still have questions? Ready to get started? Contact Thomas E. Scifres, PC, today to schedule an initial consultation.
If there are disputes as to who has rights to the residential property, those disputes are generally resolved by looking at the most recent deed to the property, the will, or the trust. Assets, including real estate, will pass either through the probate estate or will pass outside of it.
Assets that pass outside of the estate are not subject to probate administration. Upon the decedent’s death, those assets will pass automatically and skip the probate process.
For instance, if you executed a transfer on death deed, that property will go to the transfer on death beneficiary. If you executed a deed with a life estate and a remainder interest vested in someone else, the deed would transfer to that person.
Likewise, if there was a trust and the property was transferred into that trust prior to death, the trust dictates who inherits the property. The property is not subject to probate because probate assets are only those owned by you at the time of your death. When you transfer a property into a trust, the trust owns the property.
If the property passes non-probate, it should be clear to whom it passes. If it passes through the estate, you must look to the will to see who, if anyone, inherits the property.
If the will designates explicitly that the real estate goes to one or more people, you must ensure you don’t have to sell it to generate cash to pay specific claims. If that’s not the case, you can transfer the property after the claims period by deed to one or more people who are designated in the will to receive it.
If the real estate is not explicitly identified as passing to someone, then it falls into the residuary estate. All the assets in this category have been through the probate estate process, identified and assigned a value.
At the end of every will, there will be a residuary clause stating that any remaining assets are divided among certain people in specified percentages or equal shares, after the payment of all costs of administration, claims, and expenses.
Suppose in this instance there are three children, each receiving an equal one-third share of the residuary estate. If the family home is in the estate and one child wants it, they can claim it, but it will count against their one-third share. If the value of the home is more than one-third of the residual estate, they must buy out their other siblings.
In all these scenarios, a probate attorney can assist once the family goes through the estate process and values the assets.
Real estate is one of the more significant assets in most people’s estates and is usually addressed immediately. Anyone making improvements to the property without legal authority does so at their own peril. However, the personal representative will have the obligation to determine whether that person had the right to do so.
There are instances where good friends, relatives, or children of an older adult help them live at home. And in so doing, these friends or relatives have, out of their own pocket, improved the property.
While they improved the property at their own peril, it’s not inconceivable for them to seek reimbursement. The first inquiry would be to determine if that person had a legal right to the property, such as leasing the property orpurchasing it under contract. If so, the terms of the contract govern. Typically, the heirs would inherit the same rights the deceased owner had. In either case, they would have a right to the payments and then either get the property back at the end of the lease or split the balloon payment at the end of the contract. Any improvements would go with the property.
If a person was living there only upon the permission of the deceased owner, then that permission would end upon the owner’s death. Suppose a friend or relative is living there with no legal interest in the property. In that case, this issue of improvements should never arise because the personal representative has a duty to identify, gather, secure, protect, and ensure all the assets for the beneficiaries’ benefit. The personal representative would have a duty to secure the property (including eviction) and transfer or sell it – or enter into a lease agreement with the occupant, if the circumstances warrant. The latter situation would be rare, but possible. In either case, the occupant would have to prove that their improvements increased the value and unduly enriched the heirs, which would likely be difficult – depending upon the nature of those improvements. If the parties cannot reach an agreement, then the court is always there to assist.
For more information on occupant rights in Indiana probate, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (812) 359-7569 today.
Attorney Thomas Scifres is a skilled lawyer based in Salem, Indiana, who has helped clients like you navigate the intricacies of probate law. With more than three decades of experience, he is prepared to assist you in understanding your rights and obligations regarding property during the probate process.
Still have questions? Ready to get started? Contact Thomas E. Scifres, PC, today to schedule an initial consultation.
