Selling property left behind by a loved one can make a difficult time more stressful, but understanding how deceased estate sales works can ease the burden during this difficult time.
Property from a deceased estate is handled in the same way as any other real estate transaction, with just a few exceptions. While there are legal issues to consider, the executor of the Will essentially becomes the vendor if they sell the property.
They normally get a formal valuation and then engage a Real Estate Agent to manage the sale, like any other seller would.
What is probate and an executor?
When someone dies and leaves a Will, the nominated person (the executor) must apply to the court to get probate to manage the deceased person’s estate.
The transfer of property requires a ‘Grant of Probate’, which an executor applies for through the Supreme Court. This document authorises an executor to deal with the estate of the deceased in accordance with the deceased’s Will and usually takes at least four weeks to process.
Next there is a mandatory advertising period, during which the Solicitor will get all the necessary documents prepared and then after fourteen days, they are filed. If everything is in order, it can take about two weeks to finalise.
It is important to remember that the executor is empowered under the effect of the Will and must sell in accordance with any specific instructions in the Will.
Deceased estates and Capital Gains Tax (CGT)
Executors are generally allowed up to one year to wind up and distribute an estate, as there can be CGT implications if settlement happens more than two years after death. It’s important for executors to seek tax and financial advice if they think it will take longer than six to twelve months to settle the estate.
Depending on the size of the estate there will need to be a final tax return for the deceased from the beginning of the financial year to the date of death and then possibly an estate return covering from the date of death to the end of the financial year. Additional tax returns may also be required if there are ongoing testamentary trusts.
Selecting an experienced and empathetic real estate agent is key
Often, the sale of a property is a great source of joy. However, deceased estate sales can be highly emotional. It’s important to choose an Agent and Auctioneer with strong levels of empathy who can get the right outcome and understand it can be a very difficult time for those involved.
What’s the best method for selling a deceased estate?
When there are multiple beneficiaries named in a Will selling the property at auction is a popular method for deceased estates sales. This is because an auction is an open and transparent process where all parties involved can witness the negotiation.
An auction campaign is typically limited to four or five weeks and will allow the market to determine a fair price for the property.