The loss of a loved one is stressful, emotionally straining and can be an incredibly difficult time. And if you have been named as an executor of a Will, being responsible for administering the estate can add further stress – especially if it involves selling deceased property.
While the executor must ensure that the personal assets and gifts of the deceased are properly distributed, there may also be properties that need to be re-deeded or sold. This can be a daunting prospect, so we’ve outlined some of the key steps involved in selling deceased property and answered some frequently asked questions.
- Selling deceased property without a Will
- Selling deceased property with a Will
- The process of selling deceased estate property (NSW)
- How are deceased estates taxed?
- How long do you have to sell a deceased estate?
- Can the executor sell property without all beneficiaries approving?
Selling deceased property without a Will
In the instance that someone dies without a Will or a named executor, the estate must first go through the process of probate so that someone can be named to distribute the assets via the intestacy laws.
Hence, a grant of Letters of Administration must be obtained from the court. Once this letter is obtained, and an executor is named, the assets of the deceased can be distributed in accordance with the laws of intestacy.
Selling deceased property with a Will
When a Will has been properly executed and is available for review, the process is a bit different.
Again, the Will must go to probate. However, under these circumstances, it is merely for the Will to be found valid and allow for the named executor to begin properly distributing the assets. This is called receiving a Grant to Probate. From this point forward, the assets can be distributed.
However, an issue can arise when an asset needs to be sold before the value of it can be distributed to those who have been named. Most often, this scenario occurs when the family home of the deceased person needs to be sold.
Need help applying for a Grant of Probate? Speak to the probate lawyers at Owen Hodge.
The process of selling deceased estate property (NSW)
There are several steps required for an executor when selling deceased property. These steps include:
- Applying for the Grant to Probate; the home cannot be sold until this Grant has been issued.
- Having the deed put into their name so as to confer upon them the right to legally transfer the property.
- Obtain a property valuation. It is wise to secure more than one for comparison purposes.
- Inspection of the property to uncover any repair costs that might be necessary to make the property sellable.
- Interview at least 3 realtors who are familiar with the community the home is located in.
- Place the home with a real estate agent for listing and sale.
- Provide all of the necessary paperwork to support the completion of the sale.
- Distribute the value from the sale as directed in the Last Will and Testament.
FAQs about selling deceased property
How are deceased estates taxed?
When selling a deceased property, there can also be tax implications. These issues can be complex and, as such, it is highly recommended executors seek the advice from a lawyer or accountant. You can also learn more about these taxes from the Australian Tax Office.
When selling deceased property, the types of taxes that could be due include:
- Capital Gains Tax (CGT)
- Inheritance Tax
- The application of the Three Year Rule
What is Capital Gains Tax?
In its simplest form, Capital Gains Tax is paid when the beneficiary sells the property. Hence, once the executor has completed the sale of the property, the CGT will become due out of the proceeds of the sale. Subsequently, the balance of the monies can be distributed to the rightful beneficiaries.
What is the three-year-rule?
The three-year rule applies if there is no named beneficiary for the property. In this case, the property will remain with the executor and taxes will need to continue to be paid on the property per the current tax laws. During this time, it will be important for a decision to be made regarding the distribution of the property. If no decision is made, the tax rates will change after the three-year period expires.
What is inheritance tax?
As Australia does not have an inheritance tax, this issue need not be confronted. However, it is possible that other tax issues could arise and, as such, it is important to be aware of those that might apply in each specific situation.
How long do you have to sell a deceased estate?
Generally, an executor has 12 months from the date of death to distribute the estate. This is known as ‘the executors year’. However certain restraints and extensions can apply in individual circumstances.
Can the executor sell property without all beneficiaries approving?
In some instances the executor can sell the property after probate has been granted, as long as there has been no mention of keeping the property in the Will. If the property is not specifically mentioned in the Will, the executor has the duty to control the assets of the deceased and as such, can make the decision to sell the property.
Are you an executor selling property?
Estate issues can be quite complicated, particularly when selling inherited property and handling the accompanying tax issues. Under these circumstances, it is best to consult with both a solicitor and an accountant familiar with the tax code to ensure that all outstanding taxes are properly handled.
If you find yourself in need of assistance with selling the house of a deceased person or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs, including selling deceased property. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.