First of all, you may notice that the gentleman smiling at us in the photo above is likely NOT Betty Carlson on the Results Title closing welcome banner! Betty was in assisted living when her condo was listed for sale. I listed and sold her condo but never met Betty, which is not uncommon with sellers who have moved into assisted living.
This is where advance planning and assigning Power of Attorney to a trusted family member or friend is important. In this case, the smiling gentleman above had power of attorney and signed all the listing and sale documents as AIF (Attorney in Fact) on behalf of Betty. The condo would have easily closed with ownership transferring to the buyers had Betty not passed away during the time in between signing the sales agreement and pre-signing the closing docs and actual closing.
In this case, her health rapidly declined and she died 5 days before the scheduled closing date. That meant that although the sales contract was still in effect, the Power of Attorney was no longer in effect and the closing documents pre-signed as AIF were no longer any good. They had to be discarded as her estate went into probate. It can take months before a Personal Representative is assigned and everything is in place to allow a probate sale to take place. (A Transfer on Death Deed is something to consider to avoid the wait for probate.)
She very wisely had a will in place that named the Attorney in Fact as executor of her estate. As her health declined they also paid the attorney a retainer in advance so they could act quickly after her death and they didn’t have to worry about her funds being frozen for probate.
Their attorney filed a petition to Hennepin County district court for Formal Appointment of Special Administrator, which was executed 9 days after her death and allowed them to proceed to closing 25 days after the scheduled closing date.
BOTTOM LINE
- The sales contract is still in effect upon the death of the seller
- Power of Attorney is NOT in effect after the death of the seller
- A transfer on death deed is an option to facilitate a quicker closing after death of the seller
- An attorney may be able to file a petition to appoint a Special Administrator to close the sale and avoid waiting months for probate
I am not an attorney and cannot give legal advice, this is just my understanding of my recent experience. Pre-planning facilitated a relatively quick close within a few weeks rather than months after the death of the seller.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
