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It will save a lot of hassle if your Aunt can sort out the transfer into her name. As Executor, she can sign the Land Registry document called an AS1, and then send this to the Land Registry with a certified copy of the Probate. It would be wise for her to ask a Solicitor to do this on her behalf.
If she does not do the above, then the state won't claim the property, in that the property will still pass to the beneficiaries in her Will. However, there will be extra paperwork for the Executor of her Will to do, to enable the property to be sold/transferred to her beneficiaries.
I hope this assists and sets out the legal position.
But how does that work? How can my Aunt pass on to us something that essentially isn't hers? Is the property deemed to have already passed to her as she is executor?
The ownership of the property does not pass to your Aunt until the Land Registry have been notified and have received the necessary AS1.
If she doesn't transfer it into her name during her life, the Executor of her Will will need to sort out the transfer, in that if someone who is an Executor dies without finalising the Estate (which will be the case if the AS1 is not filed at the Land Registry), then the responsibility and the legal entitlement falls on her Executor to finalise matters.