- Talk with an estate attorney first thing in the process
- Inheriting property is an emotional and vulnerable time, but there is professional help
- Talk to a Realtor to get a market analysis of any real estate so you know the full value
What is a Probate?
When a person dies, even with a will, often their belongings, personal property and any real estate owned must go through the probate process, which determines who inherits what and how in accordance with the will and State law (called laws of intestacy).
Generally, a probate involves an executor, often specified in the will, and often a close family member who is responsible for dealing with selling and transferring any belongings in accordance with the will. The executor may be one of the heirs in the will. Often they are entitled to a fraction of the total estate (often 5%) to compensate for the work involved as executor.
The probate process begins with petitioning the court to appoint the executor using an estate attorney. Once appointed by the court, the executor has far-ranging powers over how to distribute the estate among the heirs.
Not all deaths result in a probate. Estates valued under a certain dollar amount can go through quicker estate administrative process instead of a probate, and some property like trusts, CDs, insurance policies, and other items with designated death beneficiaries do not need to go through the probate process. It is best to consult with an estate attorney. Several reputable ones local to the Central Texas area are at the bottom of this article.
If you are the executor of an estate, you have a fiduciary duty to the beneficiaries of the estate to prudently and intelligently distribute the assets in accordance with the will or State laws. That can be a tremendous burden during a very emotional time. Fortunately, in addition to getting an estate attorney, there is help. Below are some helpful sources specifically for those in Killeen, Temple, and the surrounding Central Texas area.
Solicit Cash Offers
Selling to an investor can be a good option for those going through an estate. Oftentimes, inherited real estate includes older homes that may not be ready to sell on the market and would require quite a bit of work and preparation to get ready to sell. It may not be the best option, but it is definitely worthwhile to find out what an investor would be willing to pay cash for any real estate.
- Steeply discounted from the full market value of the property
Talk to a Realtor
You need to know all your options. An investor offer will be a “lowball”, but how low? It might make sense to accept an investor offer, but you don’t want to be taken advantage of. Getting a market analysis from a Realtor is important in seeing the full picture. It might also be a good idea to list and sell traditionally with an agent, and get the most value from the real estate on the market.
- Get the full market value of your property
- Not as quick as selling to an investor
- Will involve getting the home ready, likely including some out-of-pocket costs
Estate auctions and estate sales are essentially glorified yard sales. Generally, your possessions will have to be worth at least $10,000 in order to be of interest to an estate auctioneer, and the cost can be approximately 30% of the auction proceeds. Estate auction services can also help coordinate other items on this list, like arranging for collectors and appraisers, though often at a fee.
- Only works with estates of sufficient value
- Major discounts on the returns versus doing a yard sale, Facebook, eBay, or Craigslist yourself
Old books and antique furniture not only can be worth something that someone at a yard sale would miss, but can sometimes be valuable to lose. That said, antique dealers and book collectors don’t like having their time wasted, understandably. It’s best to do a little bit of research on any furniture, books, or jewelry that you think is valuable.
- Discover the value of genuine antiques and books
- Ensure valuable items are protected and find a home with a collector who will care for it
- You may not have any worthwhile property to an appraiser
- Will only get 25-50% of the full value of items
Donating property and belongings to charities can be a great option. Clothes, suits, furniture, appliances, cars, electronics, and even houses all make great donations. They can be a quick way to dispose of property that beneficiaries don’t intend to keep and don’t have personal significance. Note – charities are not trash haul offs. Don’t remove everything of value and expect a charity to haul off the junk.
- If your property can help someone instead of going to the trash, that’s great!
Trash Haul Off and Cleaning
So you’ve sold and donated everything you are going to now. Especially if you are getting the home ready for sale with an agent, it’s time to get the house completely empty with a trash haul off company and cleaning company. Be sure you’ve removed everything of value from the home as soon in the process as possible, and, of course, well before the trash haul off.
Estate Tax Planning
Walter Winger – (281
Inheriting an estate often can have significant tax benefits. Any IRA distributions, for example, count as income to the heirs, and taking it all out at a single time can result in a massive tax hit.
Depending on the condition of the home, putting it on the market may seem daunting. Selling directly to an investor may be a good option, even if you take a discount, just to get the problem taken care of. Still, you should talk to a real estate agent and get a market analysis of what the value is. This will allow you to make the best decision about what a fair investor price is, and whether or not it may be worthwhile to try to list it with an agent. Even better, talk with an investor-friendly agent such as myself who can present both options and link you up with reputable investors if you elect to go that route.
An executor cannot list a home for sale, or accept an offer to buy the home, until they receive the letters of testamentary (if there was a will) or letters of administration (if there was not a will) from the court. These same items also allow the executor to access the deceased’s bank accounts and other items as needed to distribute the estate. This is part of the probate process that your lawyer will advise you on.
Selling to an Investor
- Selling to an investor is probably not the best decision for 95% of home sellers
- Investors can close very quickly, with low closing costs and no repairs needed, but are going to only work with a steep discount
- Consult a Realtor about your home’s value before selling to an investor
Paying the Mortgage
One of the executor’s responsibilities is to pay off the decedent’s creditors, including the mortgage lender. Upon taking over as executor, it is important to contact the mortgage company and inform them of their borrower’s death. The mortgage company can give advice regarding whether or not they can forgo mortgage payments and for how long. If possible, it is probably best to continue paying the mortgage from the estate checking accounts during the probate process.
Depending on the circumstances, if you are intending on keeping the home, a life insurance payout can be used to pay off the mortgage, if you are losing a stream of income that the decedent had been earning. You can also look into refinancing or assuming the mortgage.
What if the mortgage is underwater? The heirs of an estate generally are not responsible for the decedent’s debts. But the entirety of the estate must first go to paying off those debts before the heirs can expect any disbursement. If the mortgage is more than the home is worth, and there is not enough other property to sell to pay the difference, then speak with your estate attorney. The lenders will likely take the home and other estate proceeds. The heirs will not be liable for any of it, but also won’t see anything from the inheritance other than personal treasures.
Selling the Decedent’s Home
Executors generally have complete control of the process once the court grants the letters of testamentary/administration. Their powers may be confined somewhat by State laws or the will, so it is important to consult your estate attorney with questions. It’s a good idea, if possible, to get all the heirs to agree on a plan together regarding selling the property, but, in some cases, an executor can sell even without all heirs’ approval.
While on the market, the executor acts as the seller, ensuring utilities are on, negotiating offers, coordinating repairs, and other items with the listing agent. The proceeds from the sale should be deposited into the estate bank account so that it can be distributed appropriates to the heirs.
Be sure to maintain property insurance on the home. Verify that the decedent had property insurance (if there was a mortgage, the mortgage lender likely knows the insurance information).
Keeping the Decedent’s Home
If the home is being kept, like when perhaps one beneficiary is living in it, it may be necessary to have the home appraised. The appraisal can set the fair value of the home and can help divide the liquidated estate between heirs.
Fort Hood Area Estate Attorneys
You will almost surely need a lawyer to navigate the process of a probate and handling the property of a deceased relative. They are not necessarily expensive. Here are some attorneys in the Killeen/Temple metro area that specialize in probates and estates:
412 E Central Ave
Belton, TX 76513
Get help early if you inherit a property. Talk to an estate attorney and a local real estate agent in the area of the home and get the information you need for the full picture. With their guidance, the process does not have to be complicated and confusing, and you can be sure you are not leaving anything on the table when it comes to the estate.