The loss of a loved one is an incredibly challenging experience, filled with emotional strain and stress. If you have been appointed as an executor of a Will, the responsibility of administering the estate can add to this burden, particularly when it involves selling deceased property.
As the executor, you must ensure that the deceased’s personal assets and gifts are distributed appropriately, which may include properties that need to be re-deeded or sold. This process can seem overwhelming, so we have outlined key steps for selling deceased estate property and addressed some frequently asked questions.
If you have additional inquiries about how to sell a deceased estate or need assistance, please do not hesitate to contact Owen Hodge’s experienced wills and estate lawyers for expert guidance.
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.
Selling the deceased property without a will
In the instance of 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.
In the event that someone dies without a will or a named executor, the estate must first go through the process of probate so that an individual can be appointed to distribute the assets according to intestacy laws. You might wonder, what happens if a family will is lost?
In such cases, a grant of Letters of Administration must be obtained from the court. Once this letter is secured and an executor is named, the assets of the deceased can be distributed in accordance with the laws of intestacy.
When a will has been properly executed and is available for review, it must still go to probate. However, under these circumstances, it serves to validate the will and allows the named executor to begin properly distributing the assets. This process is referred to as receiving a Grant of Probate. Once this is achieved, the assets can be distributed accordingly.
However, issues may arise when an asset needs to be sold before its value can be distributed to the beneficiaries. This often 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 for expert assistance.
Frequently Asked Questions on Selling Deceased Property
Understanding the ins and outs of deceased estate property can be complex; hence obtaining the advice of a legal professional is recommended.
When selling a deceased property, there can also be tax implications. These issues can be complex, so it is highly recommended that executors seek 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
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.
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.
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.
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 to individual circumstances.
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.
What happens when a sibling disputes a parent’s Will?
If the deceased did not designate a beneficiary for the land in their will, the property must be transferred to the executor through a transmission application. This application should be submitted to the executor and registered with NSW Land Registry Services using an electronic lodgment network operator (ELNO), such as the PEXA platform.
If a portion of the estate has been distributed and you are one of the beneficiaries, you may purchase the house if you can afford it and if no other beneficiaries oppose the sale. However, this approach is usually discouraged, as it can lead to conflicts among family members.
Are you an executor selling property?
Estate issues can be quite complicated, particularly when selling inherited property and handling any will disputes. Under these circumstances, it is best to consult with both a wills and estates 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.