Probate Must Precede Disposal of Inherited Property

Q: A few years ago, I inherited a building lot in Florida from my mother. Although I have always kept the taxes current, I have never transferred title to my name. I am thinking about selling and wonder whether I could do so with a quitclaim deed. Or do I have to go through the process of transferring title to my name? Although I have a brother, my mother's will left the lot to me.

Finally, am I correct that I can step up the basis to the time of my mother's death?

A: The second question is easy. Yes, you can claim the stepped-up basis as of the date of your mother's death. That means that, for tax purposes, you can use that number to calculate the amount of capital gains tax that would be owed if you sell, rather than the price your mother paid. The stepped-up basis will probably save you money.

Now let's get to your other question. I am not licensed to practice law in Florida, so you should confirm my opinion with a lawyer in that state.

Generally speaking, however, when a person dies owning property, a probate estate must be established. The probate court will appoint a personal representative, also known in some states as the executor.

There are important rules that the personal representative must follow, most notably to advertise the fact of death in a newspaper of general circulation. Your state statute will spell out the length of time and the number of ads required. The purpose of this is to permit creditors of the deceased to file any claim against the estate.

In most states with which I am familiar, until the personal representative is appointed by the court, the property remains in limbo. Once a personal representative is in the picture, title to the lot will vest in that person.

The fact that your mother left the property in her will is important and helpful to you. But if your mother owed creditors more than the property is worth, it may have to be sold to satisfy these obligations.

You asked about a quitclaim deed. This is a document with which the grantor gives the grantee whatever rights he has in a piece of property. It makes no promises or representations of ownership: If I own it, it is yours. I am prepared to give anyone a quitclaim deed to the Washington Monument, for example. This kind of deed is often used in a divorce proceeding, where one spouse deeds the family home by quitclaim to the other spouse.

It's not an option likely to appeal to a would-be buyer, who actually would want some assurance that you own what you are selling.

Neither a quitclaim deed nor any other process short of probate will put the property into your name. You will have to petition the probate court to open up a proceeding, and (depending on state law) you can even be the personal representative. Your mother's will may even have specifically appointed you to this position.

The probate proceedings must take place in the jurisdiction where your mother had her principal residence, which may not be Florida.

I urge you to take immediate action to get the property probated. Once this is accomplished, the personal representative can convey the property to you or to a third party.

Benny L. Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed stamped envelope to Benny L. Kass, Suite 1100, 1050 17th St. NW, Washington, D.C. 20036. Readers may also send questions to him at that address.