Potential difficulties regarding transferral of property and probate

Question:
Several years ago I transferred my house to my 4 children, keeping a “Life Estate” for myself. Since then, one of my children passed away. I now want to sell the house, but I was told that my deceased son’s estate would have to be probated before it can be sold. Is this true?
Answer:
Maybe. It depends on how the property is titled. If you transferred the property to your children, jointly, with right of survivorship, then your surviving children now own your deceased son’s interest in the property. However, if you transferred the property to your children as tenants-in-common, then your deceased son’s interest belongs to his estate and has to be probated. The probate process will legally transfer your son’s interest in the property to his beneficiaries in accordance with his Will. If he died without a Will, then his interest in the property will pass to his heirs at law, generally, his spouse if he has one, or to his children. Your son’s beneficiaries or legal heirs will then have the right to make a decision about what they want to do with the property, including whether or not they want to transfer their interest back to you so you can sell the house like you want.
Often, older people transfer their homes into the names of their children, sometimes reserving a life estate in the home. A life estate gives the person transferring the home the right to live in the home or rent it out during her lifetime, but she must continue to pay taxes, insurance, and upkeep on the house during that lifetime. The person to whom the home is transferred is referred to as the “remainder person” because he or she acquires full title to the property after the death of the person holding the life estate. Upon the death of the life estate holder, the property goes to the remainder person(s) automatically, without probate.
This attempt to avoid probate, is one of the many reasons a person may transfer his or her property to another. However, as with all legal transactions, there are advantages and disadvantages which should be carefully discussed with an attorney prior to taking action. One problem that should always be considered is the possibility of a remainder person dying before the life estate holder. As you have discovered, if a remainder person dies before the person with the life estate, things can get tricky and the outcome may not be what you would expect or want.