Get Help with the Documents Needed for Closing
To close a sale of probate property, you need a specific type of deed, called a Personal Representative’s deed. You also will need other documentation to verify your authority as Personal Representative to convey the property to the purchaser. To close the sale of a property held in a trust, you need a trustee’s deed and a Statement of Authority under CRS §38-30-172 to verify the trustee’s authority to convey the property.
A Personal Representative’s Deed is a different type of deed than more typical forms of deeds used to convey title to real property in Colorado. To make things more difficult, the majority of title companies in Colorado will not prepare a personal representative’s deed for a closing. The title companies view this as the purview of the estate’s attorney. Therefore, it is important to work closely with your probate counsel to make sure a proper deed is drafted, reviewed, and agreed upon by all parties to the transaction before closing.
In addition to the Personal Representative’s Deed, you will need to have at least one original copy of the Letters Testamentary or Letters of Administration issued by the probate court in the probate proceedings for the decedent. Letters Testamentary are issued by the court in probate matters where the decedent left a will. Letters of Administration are issued by the court when the decedent did not leave a will. These documents are required to be recorded in the county where the real estate is located to establish the personal representative’s authority to convey the property to a purchaser. Failure to record Letters before the property is conveyed can create a situation where the title is “unmarketable” under applicable CRETS.
A trustee acting on behalf of a trust in a real estate transaction establishes her authority to act on behalf of the trust by recording a Statement of Authority under CRS §38-30-172 with the Clerk and Recorder of the county where the property is located. The title company also may request a copy of the trust document, or an affidavit of trust, to verify the authority of the trustee.
For selling probate or trust real estate, the type of deed to be used to convey the property should be identified in the purchase contract with the proposed buyer. The Colorado Real Estate Commission approved standard form purchase contract has a section (Section 13) that calls for the seller and buyer to agree on what type of deed to use for the conveyance. A real estate broker who is well-versed in probate and trust property sales will know the type of deed to use. The type of deed matters in a real estate transaction because not all deeds convey the same warranties of title to the buyer. Obviously, the buyer will want a deed that provides the greatest warranties of title, while the seller will want one that involves the fewest. Failure to use the appropriate deed may result in the seller making warranties to the buyer that go beyond the scope of the personal representative’s knowledge or authority.
