April 2007
Pursuant to Washoe County District Court Rule 57, all estate and trust matters are referred to the Probate Commissioners of the Second Judicial District Court. All cases are reviewed and analyzed by the commissioners and staff. All cases set for hearing are heard by the probate commissioner, uncontested and contested.
Each case is reviewed and analyzed before approval. When a hearing is scheduled on a matter, the commissioners’ office places information on the Washoe County District Court website regarding the status of the case, i.e., if the matter is on the approved calendar (requiring no appearance by counsel or personal representative) or on the heard calendar (requiring presence of both counsel and personal representative) and the deficiencies that must be cleared prior to the hearing date.
Approximately 1600 matters, uncontested and contested, are heard in the Probate Division each year, with a value of over $1.5 billion. Matters submitted for signature without hearing average 700 per year. The probate commissioners also conduct mandatory settlement conferences on every contested matter. More than 80 percent of the matters on which settlement conferences are conducted are successfully settled. The probate commissioners also conduct continuing legal education seminars. Many of these are taught at the Washoe County Probate Bar luncheons.
In estate administration matters, there are several areas that cause confusion. One of those areas, sales of real property, is discussed in this article.
Sales of Real Property
The “requirements for sales of real property in an estate” is probably the most misunderstood procedure in estate administration. Prior to handling a sale in an estate administration, you should review NRS Chapter 148. In addition, you may wish to devise an office checklist to ensure that all procedural requirements are met in each matter you handle.
If you do not have a will, or if you have a will but it does not provide the personal representative with the power to sell property without notice, then you must publish a notice of sale, pursuant to NRS 148.220, et seq.
A notice of sale is not a notice of hearing. A notice of sale is a legal notice that is published in a newspaper circulated in the county in which the property lies. The notice advises the public that the property is for sale and invites prospective purchasers to send bids to a certain location. You may wish to think of a notice of sale as equivalent to listing the property with a realtor (which you can do simultaneously as the publication of the notice of sale).
The notice of sale must be published. NRS 148.220. The publication of the notice of sale is effective for one year. If you know at the outset of your estate proceeding that you must sell a piece of property, it is a good idea to publish your notice of sale and obtain an appraisal early. Then, when you receive an offer, the publication and appraisal are already complete and you can immediately proceed to confirm the sale.
If you have a time issue and you have not published your notice of sale, i.e. your client informs you that he has an offer with limited time to close, you may petition the court for an order shortening time and number of publications to one. The court, for good cause shown, may decrease the number of publications to one and the time of publication to eight days. NRS 148.220. You should make sure to calculate these dates carefully to ensure publication is effective.
As mentioned above, if you have a will that provides the personal representative with power of sale without notice, or if the will directs that the property be sold, you do not have to publish the notice of sale. NRS 148.080. You merely file your return of sale and petition for confirmation and send a 10-day notice of hearing to interested parties (including the buyer).
The 2001 Legislature amended Chapter 148 to allow the court to waive the publication requirement if the personal representative is the sole devisee or heir of the estate, or if all devisees or heirs consent in writing. In this situation, the personal representative may rely on the assessed value of the property.
All sales of real property must be reported to the court and confirmed by the court before the title to the property passes. NRS 148.060. In addition to real estate and improvements, real property interests include water rights and mineral rights.
Once you have an offer, either as a result of the publication or from your realtor, you then petition the court for confirmation of the sale of the property. The acceptance of the offer and the resulting contract is subject to court confirmation. A notice of hearing is mailed for a petition for confirmation of sale. It is not published.
Remember that sale of the property and court confirmation of the sale are two separate and distinct actions.
Make sure your return of sale and petition for confirmation includes the name(s) of the buyer(s), the sales price, any realtor’s commission and any unusual terms of sale. Also, you should attach a copy of the offer and acceptance to your petition. If the sales price is significantly lower than the appraised value of the real property, discuss why this is the case in your petition. For example, you should explain that the property has been on the market for a significant period of time, that the property is in need of major repairs, or any other factor that affects the desirability of property.
The court will not confirm a sale unless the property has been appraised (by a certified real estate appraiser) within one year from the date of the hearing to confirm. NRS 148.195. Thus, make sure your appraisal is current. Even if within the year, in the current declining real estate market, you may wish to obtain a new appraisal, closer in time to the sale in order to avoid questions from the devisees or heirs.
The probate commissioner hears confirmation hearings. At the hearing, the court considers the necessity for the sale or the advantage, benefit and interest of the estate in having the sale made. The court determines that the sales price is not disproportionate to the value and inquires if there are overbids by any third parties. If there is an overbid, the court usually conducts an auction and confirms the sale to the highest/best bidder. The overbid must be five percent if the sales price is not more than $100,000 or $5,000 if the sales price is $100,000 or more. Thereafter, the court usually requires $1,000 increments in any auction conducted.
A proposed order must be presented to the court and is required to contain the buyer(s) name, the Assessor’s Parcel Number and the legal description of the property. WDCR 57.8. Incorrect legal description is the single greatest reason amended orders are required at closing. This order must be recorded in the county recorder’s office of the county in which the property, or any portion thereof, is located. NRS 148.280.
If you have questions regarding a sale, you may call the Probate Commissioners’ Office and discuss it with our staff or the probate commissioners (if it is an uncontested matter). The Probate Commissioners’ Office is located on the first floor of the Washoe County Court House, Room 150. Our telephone number is (775) 328-3100.
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Washoe County Probate Commissioners Pamela Gullihur and Lynne K. Simons are retiring. Linda A. Bowman has been selected for appointment by the judges of the Second Judicial District Court as the next probate commissioner, commencing March 5, 2007.