After the death of a loved one, it is often hard for family members to move forward and make important decisions such as selling a home, due to the overwhelming grief they feel. The home that a parent lived in may be in poor condition and fall further into disrepair if the house was not maintained well. When siblings have emotional attachments to the family home, says the article “With proper planning, selling a parent’s house can be a relatively painless process,” from The Washington Post, things can get even more complicated.
It can be difficult to sell a parent's home after their death because it depends on the type of advance planning that has taken place that can help with the transition.
Much can also depend on whether the heir is working with the right professionals in handling the sale of the home and managing the estate. The sooner you begin the process of working with a probate attorney, the better.
Parents can also take steps while they are still living to minimize complications. Although these are difficult conversations, having them will make the process easier and for everyone and allow them time to focus on their emotions rather than the stress of selling property. Below are a few pointers.
Step 1: Check if your parents have a will.
Make sure your parents have a will. Many Americans do not. A survey from Caring.com found that only 42% of American adults had a will and other estate planning documents. There may be information about the home in the will, and the home may also be required to go through the probate process.
Step 2: Fix up and secure the property if necessary
First, secure the property by having the locks changed as soon as possible. Once an heir (or someone who believes they are or should be an heir) starts to move in, it can be even more complicated to get them out.
Also, expect to spend some money on the home, as there may be costs associated with fixing some overdue repairs and maintaining the property. Make sure you save all receipts and estimates.
Step 3: Hire a Professional to Value the Property
Find out the real value of the property by having a real estate agent run a competitive market analysis on the property.
Also, consider an appraisal from a licensed appraiser. Avoid any accusations of impropriety—do not hire a friend or family member. This should be strictly a business transaction.
Step 4: Contact the Heirs
Designate a contact person, usually the executor or personal representative, to keep the heirs updated on how the sale of the house is progressing. One of the obstacles that executors face is the emotional attachment of children to their family home. It can take time to clean out the family home, and the longer the process, the more complex it can become.
Step 5: Prepare the home for showings
Now is not the time to perform major renovations. Take care of the cosmetic repairs so that the house is more marketable, but avoid any substantial improvements as that will unlikely impact the sale price.
Remove all family belongings and show the house either empty or with professional staging to show its possibilities. Clean carpets, paint, if needed and have the landscaping cleaned up.
Step 6: Understand the tax consequences
Always remember to consider the taxes involved. Depending on where the property is, the location of the heirs, and the amount of money being inherited, there can be a wide range of estate, inheritance and income taxes involved.
It is usually best to sell an inherited property, as soon as the rights to it are received. When a property is inherited at death, the property value is “stepped up” to fair market value at the time of the owner’s death. That means that you can sell a property that was purchased in 1970 but not pay taxes on the value gained over those years.
Contact Our Attorneys for Help
We invite you to talk with our experienced estate planning attorneys about what can happen to the home of a deceased family member.
Depending on your situation, it may be beneficial for parents to create a revocable trust that will allow a child to continue living in the home for a specified period of time. Similarly, a parent may provide instructions for the child to buy it from the trust. Trusts are an easier way for heirs to administer homes through after parents pass away, and do well to minimize family conflicts.
