How Does An Underwater Home Affect the Nevada Probate Process?
It is difficult losing a loved one in death, and issues can emerge that make it even more overwhelming. If an estate is opened in Probate Court, a Nevada Probate lawyer can help navigate through this difficult process.
In many probate cases, the deceased had outstanding debts at the time of their passing, and they may have had a mortgage on their house. What happens when the house is “under water”, meaning that more is owed on the house than it is worth?
Probate in Las Vegas can be confusing, but it is helpful to learn a few of the terms used in Probate Court. A court-appointed personal representative manages the estate of a deceased person. They can pay taxes, debts and expenses, collect, manage and invest the deceased’s assets, and distribute remaining property or assets to heirs or beneficiaries. If the estate has enough money, the Personal Representative can pay off the mortgage. If there is not enough money, a Las Vegas Probate lawyer can discuss other options.
A Notice to Creditors is sent to the mortgage company and all other known creditors. Under Nevada Statutes NRS 145 and 147, creditors have 60 or 90 days to respond and make a claim against the estate. If a claim is not timely filed, a court order can release the Personal Representative, attorneys and estate from liability for the mortgage balance.
With court authorization, the Personal Representative may be able to sell the house. Since it is unlikely that a buyer would pay more than the house is worth, the house could be sold as a short sale. A short sale is when a house is sold for less than the remaining balance of the mortgage and the proceeds go to the lender, creating a deficiency. In Nevada, the lender may forgive the deficiency and the estate will owe nothing more on the property.
If several mortgage payments are missed, the lender could sell the home as a foreclosure. In Nevada, a lender may seek a deficiency judgment to recover the difference between the mortgage balance and sale price. In 2011, the law changed to limit the amount the lender can recover. Under certain conditions, the lender may even be prohibited from receiving a judgement. (NRS 40.455 and NRS 40.459).
Probate matters are challenging and require a lot of important decisions and following state processes and procedures. A Las Vegas estate in probate is best handled under the guidance of a probate lawyer. Rob Telles, a Nevada probate attorney can help walk you and your family through this difficult process. Ensure your loved ones are protected in the future by calling Accolade Law at 702-337-3000 to arrange a free initial case consultation.