Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed Tennessee attorney for guidance specific to your situation.
Detailed Answer
When an estate lacks sufficient cash to pay valid claims, Tennessee law allows the personal representative to sell real property owned by the decedent. These steps detail how to bring real property into the estate for the purpose of satisfying creditor claims under Tennessee Code Annotated (T.C.A.) Title 30.
1. Identify Real Property and Confirm Title
The personal representative should locate all real estate records, deeds, and mortgages. Verify that the decedent held clear title and that no surviving co-owners already control the property. Confirm whether the property passes under a will or via intestacy.
2. Petition the Probate Court for Authority to Sell
File a petition in the probate court that has jurisdiction over the decedent’s estate. Tennessee law requires a court order to sell real property to pay debts. Reference T.C.A. § 30-2-109 for the procedure governing the sale of real estate to pay debts.
3. Provide Notice to Interested Parties
After the court grants the sale order, the personal representative must notify heirs, devisees, beneficiaries, and known creditors. Tennessee rules typically require service by mail and publication in a local newspaper. This gives all parties an opportunity to contest the sale.
4. Conduct a Public Sale
Sale must occur as a public auction or by sealed bids, as directed by the court. Advertise the sale in the county where the property lies and follow any specific local rules for auction format. Record the sale results in the probate file.
5. Confirm the Sale and Allocate Proceeds
Return to court to confirm the sale. The judge will review the sale process and bid amount. Once confirmed, the proceeds enter the estate’s assets. The personal representative distributes funds according to the priority of claims under T.C.A. § 30-2 (defining proof and payment of debts). Priority typically follows funeral expenses, administrative costs, secured claims, and unsecured creditors.
Helpful Hints
- Review the decedent’s will or intestacy rules first to avoid selling exempt property.
- Obtain a current title search to uncover liens or encumbrances before petitioning for sale.
- Consult court clerks in the county of probate for local notice requirements.
- Keep detailed records of all notices, advertisements, and bids for the court’s review.
- Ensure all creditor claims are timely filed to be eligible for payment from sale proceeds.
- Work with a real estate broker experienced in probate sales to maximize value.