How Escrow Works in Probate

Deceased’s Property:
When a person dies, their property, including real estate, personal property, and financial assets, becomes part of their estate.

Probate Process:
The probate process is the legal procedure for transferring these assets to the designated heirs or beneficiaries.

Escrow’s Role:
In a probate sale, an escrow account is used to hold the proceeds from the sale of the deceased’s property. This ensures that the funds are not immediately dispersed but are held in a controlled manner.

Distribution:
The escrow agent, following instructions from the probate court and the personal representative of the estate (e.g., executor or administrator), will distribute the funds to the appropriate parties, such as creditors, heirs, and beneficiaries, as outlined in the will or probate laws.

Example:
If a deceased person owned a house, and the estate decides to sell it during probate, the proceeds from the sale would be deposited into an escrow account. The escrow agent would then ensure the funds are used to pay outstanding debts, estate taxes, and ultimately, the remaining balance is distributed to the heirs according to the will or probate laws.

Key Benefits of Using Escrow in Probate:

Ensures Proper Distribution:
Escrow helps ensure that assets are distributed according to legal requirements and the deceased’s wishes.

Protection for Beneficiaries:
It provides a safeguard for beneficiaries, ensuring they receive the correct amount of funds after the probate process is complete.

Compliance with Probate Laws:
Escrow helps the personal representative comply with probate laws and procedures, reducing the risk of errors and legal issues.

Streamlined Process:
It can streamline the probate process, making it easier for the personal representative to manage the financial aspects of the estate.