The SECRET behind Probate v.s. Trust Inheritance Properties.

Inheritance Properties Niche Market...How it works?

While many property investors focus heavily on obtaining probate leads because probate properties are often sold below their market value and therefore can make great investments, there’s a common misconception out there that finding probate properties are the only way to go. And many investors, in their search for probate leads, are often disappointed to find out how many inheritance properties do not actually go to probate. While billions of dollars flow through the probate courts every year, only 20% of inheritance properties – or less – are actually sold through probate.

But that’s not bad news. Because while probate properties can take 8-9 months to process a sale, a sale through a living trust can happen in just 5 minutes, without the need of court approval. And that’s where SuccessorsData comes in. So before you look the other way because you think probate sales are the only way to go, you should know that there is a much better, faster and cleaner way to buy inheritance properties.

To explain, let me quickly show you the difference between a probate property and an inheritance property controlled by living trust.

A probate property works like this. When a property owner passes away, they either do so intestate – that is, without having bequeathed that property to someone else. Or testate, having left that property in their will to another person. In either case, there is a petition for probate that is launched in that state. And either the person named in the will is in charge of administrating the estate, or the government appoints a suitable administrator. In either case, that person is in charge of managing the estate while any creditors that the deceased property owner was indebted to are paid off. This might include medical expenses, bank loans, or any other debts. And so, assets are sold to raise capital and pay any liabilities. These assets might be personal belongings such as stocks, household furnishings, jewelry and so on. Or it might include other properties, or part of the property, such as land, buildings, or other family or commercial properties and so on. The estate is liquidated, any debts are paid off, the heirs receive what’s left, and only then is the property in question released for sale. Often these properties are at a discount and might be good for investors, but there are plenty of risks involved and the process can be a long waiting game.

Again, only 20% or less of inheritance properties end up being sold through probate.

But 60% of inheritance properties are sold through a living trust, which is a much less painful process.

You can think of a living trust as a container, much like a corporation. It is simply a legal entity that is controlled by one or more members.

For instance, let’s say a husband and a wife – Steven and Maria Johnson – own several properties and many assets. They go to see an estate attorney, and ask them to set up a living trust where they can put their assets, then determine what happens and who controls their estate. One of these assets is a house they own.

So the estate attorney will tell them the best way to handle it is to establish a living trust. The attorney will draw up a Quickclaim deed, which puts all of their assets in the living trust.  Both of their names will be on it. And while they are alive, either one of them, or both of them jointly, will have the power to make all decisions regarding that living trust.

So technically, the living trust is the owner of the property, and as trustees of the living trust, this husband and wife control its assets. When one passes away, the other automatically becomes the sole owner of the property, or the remainder joint tennant.

In a living trust, the trustee or trustees will also list a person or persons as successor trustees to take over the management of the living trust once the original trustees are deceased. And that person will then have the power to sell any of those assets, including the house, in any way they like. It does not have to go through the liquidation and probate process. It can be sold directly to an interested buyer, in as much time as it takes to draw up a contract. Not months, but minutes.

This process currently accounts for 60% of inheritance property sales. And while there will always be probate courts, as more baby boomers are educated about this process, this number will rise.

So again, a sale through the probate courts can often take several months, while a sale through a living trust can happen within hours.

Now that you understand this general overview, let’s look at our data in successors data. These owners are those who are operating the property within a living trust. The original property owner wanted to make it easier for their heirs by avoiding probate courts. And of course, the original property owner is going to make him or herself a trustee, because while they’re alive they don’t want someone else to sell their property and put them out on the street.

So this is what estate lawyers advise their clients, as it’s the best way to play it safe in the often complicated world of estate management.

Now the beauty is, when this living trust is created, so is a record of who came to see the attorney, as well as the location of the property.

In this case, a husband and wife were operating the living trust. The husband passed away, leaving his wife as the sole administrator of the trust. These properties owned by a trust will only go to probate courts if multiple trustees are contesting the trust and the judge decides to send it to probate. So the data for most of these properties are never going to show up when looking for probate leads, because these properties never even make it to the probate courts.

So let’s quickly look at a real life example. We’ll come to our successors data records. And let’s look at some properties that have been sold. Of course we bring in all of these properties that are still for sale, but once they are sold, they are removed from our list here, and they show up in our data sold archive.

In this case, we see that this property was owned by someone who passed away on August 28, 2016. The owner was 110 years old. A long and fruitful life indeed, including living through 19 US presidents, bearing daughters, having granddaughters, and being a die hard Lakers fan. And among her legacy was this property she owned in Glendale, California. We can look up this property on Zillow, and we see that it was sold on January 11, 2017. Just 3 months after she passed away. The successor trustee who controlled the living trust sold the property. If this had gone through the probate courts, this process would have taken another year for the sale to go through.

Now plenty of these properties sell, so the first category we’ll see in the ownership column are either joint tenants, of properties in a living trust. Neither of which are probate.

And now you’ve got a good idea of how the process works, and why looking for probate leads only is a sure fire way to limit yourself when it comes to investing in inheritance properties.

With Successors Data, you’ll not only be able to find thousands of great leads on available properties, but feel free to join our webinars, and check out further tips and training on how to best approach property owners and invest in great deals.

For more information on Inheritance properties please visit www.Successorsdata.com or email me at [email protected]

Tel 909-315-5330

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