It’s an emotionally trying time. Mourning the loss of a parent or other relatives is magnified, when the decendent’s home has to be emptied out and sold soon after they pass away. If other relatives live far away, it usually falls to the one living closer to handle.
Here is a typical example: the surviving child of her father’s estate was 28-year-old Ashley Carson, whose real estate experience was renting her own apartment when she graduated from school. When her father died, she was named his executor. Her responsibilities included cleaning out and selling both the family home and the family’s cabin in the mountains, neither of which were near her home. An older sister lived in California, too far away to help.
Ashleys first step was to find a real estate agent with estate sale experience, from the agent, she learned about probate, as well as the local building codes and repairs that needed to be made. An additional difficult task was telling her father’s friend, who’d been bunking in the cabin, that he’d have to move.
Coping with a death of a parent is challenging enough, but selling their home can be extremely stressful for children. It’s even worse, if they die without a will. Grieving family members may be ill-equipped to make decisions and a home can fall into disrepair. Siblings may have emotional attachments to it and unrealistic expectations about the sale price. During this process, the bills of the house continue and need to be paid and can mount.
The job can be difficult and long or relatively easy. It depends in large part on the heirs’ ability to ask for help and hiring a professional. Experts say the sooner the process starts, the better. Parents can also take actions while they’re alive to help avoid complications, even if the discussion may be difficult and awkward to avoid the need for children to be scrambling while grieving. Here are some helpful tips:
- The owners should draft a will describing what should be done with the house.
- Provide a fund to your executor or heirs to cover the immediate costs associated with maintaining and selling the property.
- Provide keys to your executors and the means to change the locks to keep heirs out.
- Ask a real estate agent to run a competitive market analysis and have an appraisal done by a licensed appraiser.
- Designate a lead person so the executor can keep all heirs informed through one person.
A common deterrent to selling a parent’s house is the emotional attachment of the children, as their former home. Make it known that the house should be sold so there are no disagreements. If there are cosmetic fixes needed, determine how these will be paid and will this investment result in greater payout. Seek an expert’s advice on the need to make improvements.
Selling a family home also requires knowledge about taxes, which could be explained by an estate planning attorney at our firm. Depending upon where the home is located, there may be estate, inheritance and income taxes to be factored into the sale. There’s usually a benefit to selling an inherited property soon after receiving rights to it, because when a property is inherited after a death, the value of the property is stepped up to fair market value at the date that the owner died. Therefore, an executor may sell a property that was purchased in 1970 but won’t have to pay the taxes on the value gained over all those years.
Reference: The Philadelphia Inquirer (June 22, 2019) “With proper planning, selling a parent’s house can be a relatively painless process—or not”