Vol. 12, No. 4, Pg. 20. Transfer of Real Estate at Death - Do Probate Code Changes Resolve the Issue?.

• Author: By James C. Hardin III

South Carolina Lawyer

2001.

Vol. 12, No. 4, Pg. 20.

Transfer of Real Estate at Death - Do Probate Code Changes Resolve the Issue?

20Transfer of Real Estate at Death -- DO PROBATE CODE CHANGES RESOLVE THE ISSUE?By James C. Hardin IIIBy its enactment of Bill 1291 on June 22, which Governor Hodges signed into law on August 17, the General Assembly sought to put to rest differences between probate and real estate lawyers and title agents concerning the transfer of real estate titles. The legislature also made various other changes affecting the practices of real estate, probate and litigation attorneys.

PERSONAL REPRESENTATIVE'S POWER OF SALE

For years, South Carolina real estate and probate lawyers have debated whether a personal representative of an estate who is given the power to sell real estate can do so without the joinder of the devisees. South Carolina practitioners routinely draft wills giving personal representatives the power to sell real estate. Many such wills also devise real estate, either specifically or under a residuary devise, to the client's selected beneficiaries.

When during estate administration the personal representative sought to exercise the power to sell the real estate, attorneys for the buyer frequently required that the devisees of the real estate join in the deed of conveyance. Caution seemed to dictate this approach, because § 62-3-101 of the South Carolina Probate Code provides, as did pre-probate code law, that title to real estate passes at death to the devisees under a decedent's will or to the heirs at law in cases of intestacy. Fairness also suggested such joinder by devisees, particularly in the case of real estate specifically devised to a certain devisee. After all, does not § 62-3906(a)(1) of the Probate Code provide that "[al specific devisee is entitled to distribution of the thing devised to him?"

Some sales were stalled, however, particularly those involving real estate passing under a residuary clause to a large number of individuals or entities. For such situations, the Probate Code did not establish a preference for distributions in kind, and many of these devisees may not have cared whether they received the real estate or the proceeds of the sale thereof. Yet questions from even one such devisee-for example a corporate or charitable devisee that must act through a board-could hold up sales even where the will appeared clearly to give the personal representatives the power of sale.

Probate practitioners, many of whom drafted such wills, pointed to § 62-3-711(a) of the Probate Code, which specifically provides that a personal representative has the same power over title to real estate "that an absolute owner would have, in trust however, for the benefit of creditors and others interested in the estate." The statute provides that this power may be exercised without notice, hearing or court order, and that this power also includes the power to sell real estate if the will so provides. S.C. Code Ann. § 62-3-711(b) (Law. Co-op. 1976). Will drafters argued that there was hardly any reason to include a power of sale of real estate in a will if it was rendered illusory by the requirement of a joinder of the devisees. Was the testator's intent to empower his or her personal representative being thwarted?

The new legislation seeks to put aside these questions. The General Assembly has amended § 62-3-910, which deals with transfers of a

22 decedent's real estate for value, adding a new subsection (B). It provides that if a will authorizes the representative to sell real estate, a purchaser for value who receives a deed from the representative takes title free of the rights of heirs or devisees, and that such protection is afforded "regardless of whether the heirs or devisees to whom the title had devolved [at death] . executed or consented to the deed."

In this context, the term "deed" means a title to real estate from the representative to the purchaser, with general or limited warranties, as the practitioner deems...