In this webinar, Brian Barrera and Eric Carrera, trusted Estate attorneys in Massachusetts, Rhode Island, and Florida, discuss important information regarding the sale of real estate by Estates and trusts in Massachusetts and Rhode Island. They cover topics such as estate tax liens, probate processes, estate taxes, and the quirks of real estate Deeds in both states.
Estate Tax Liens:
When someone dies and owns an interest in real estate in Massachusetts, there is an automatic lien on the real estate. This lien is not recorded but is known by real estate lawyers who handle sales of real estate. To remove the lien, there are two options. If the gross estate is over a million dollars, an estate tax return must be filed, even if no estate tax is due. If the gross estate is below a million, an affidavit can be used to get rid of the lien. This affidavit needs to be recorded in the chain of title. In Rhode Island, the threshold for a taxable estate is currently 1.7 million dollars.
Estate Tax Returns:
In Massachusetts, even if an estate is not taxable, an estate tax return must be filed to remove the lien on the property. The estate tax is calculated based on the value of the real estate compared to the total estate. The lien lasts for 10 years, and penalties start running after nine months. In Rhode Island, a license to sell can be obtained without filing the estate tax return, but the return must be filed eventually, regardless of whether the estate is taxable or not.
Delays in Probate Process:
Both Massachusetts and Rhode Island have a probate process for real estate owned by a deceased individual. In Massachusetts, the process can be delayed due to court inefficiencies. It can take up to two months for the court system to start processing the necessary paperwork. In Rhode Island, probate matters are handled on a town-by-town basis, and hearings are held once a month. While this results in a quicker process once in court, there is a wait for the next hearing date.
Sales by Estates:
When someone dies owning real estate in their own name, a probate process is required. If there is a will, the will controls who inherits the property. If there is no will, Massachusetts laws determine the heirs. A personal representative must be appointed to handle the estate before a purchase and sale agreement can be signed. If the will grants the power to sell, the property can be sold immediately. Without that power or in the absence of a will, a license to sell must be obtained from the Probate Court.
Registered Land and Deeds:
Massachusetts has two types of real estate Deeds: regular recorded Deeds and registered land Deeds. Registered land Deeds require approval from the land Court in Boston before they can be accepted. Even with the necessary authority to sell, the land Court will not accept the Deed without their sign-off. A certified copy of the certificate of title is required to show ownership.
Selling real estate in Massachusetts and Rhode Island involves navigating various legal processes and requirements. Understanding the estate tax liens, probate processes, and the differences in each state’s laws is crucial for a smooth sale. Whether it’s filing estate tax returns, obtaining licenses to sell, or dealing with delays in the probate process, sellers and their attorneys need to be aware of the complexities involved in these transactions. By staying informed and following the necessary steps, sellers can ensure a successful sale of their real estate in Massachusetts and Rhode Island.
Please note that the information provided in this article is based on the webinar and should not be construed as legal advice. It is recommended to consult with an experienced attorney for guidance specific to individual circumstances.