A lot of people ask how ownership of real estate passes to their heirs. Title to real property passes to your heirs either pursuant to the terms of a valid will or subject to the North Caroline intestacy statute. North Carolina law says that when people that die without a valid will title to their real estate passes to their intestate heirs, as defined by the statute, upon the owner’s death. However, title to real estate that is passed by a will is not valid until the will is “submitted to probate.” This does not mean that an estate has to be opened and administered, but rather that the will has to be properly filed with the clerk of court in the county in which the property is located. For the transfer of title under the will to be valid, the will is submitted to probate in the county in which the real estate is located within two years of the owner’s death or before the clerk closes the owner’s estate.
When heirs inherit real estate, they inherit it subject to the mortgage and ay other liens on the property. Generally, the bank that holds the mortgage will give the heirs some time to go through the probate process, but they are not required to. Unless there is a specific provision in the will telling the executor of the estate to pay off the mortgage, the heirs have no right to require the estate to pay the loan on the property before or after it transfers to the heirs. Generally, the heirs will either sell the property or refinance it.
Real estate does not pass to your estate unless you give your property to your estate, to be sold for example. The executor can, with the assistance of the courts, bring real estate back into the estate to pay creditor’s claims.
If you have further questions or want to discuss this in more detail, don’t hesitate to contact us.