A study conducted by The Blackstone Group, an independent research firm, on behalf of Bankers Life…
It’s an emotionally trying time. Mourning the loss of a parent is magnified, when the family home has to be emptied out and sold soon after they pass away. If other siblings live far away, it usually falls to the one living closer to handle, regardless of their experience.
Finding a place to rent in San Francisco was the full extent of 28-year-old Ashley Carson’s real estate experience. When her father died, she was named his executor. Her responsibilities included cleaning out and selling both the family home and a cabin in the mountains, neither of which were near her home. An older sister lived in New York, too far away to help.
The Philadelphia Inquirer’s recent article, “With proper planning, selling a parent’s house can be a relatively painless process—or not,” says that after finding a real estate agent with estate sale experience, she learned about probate, as well as the local building codes and repairs that needed to be made.
She was even tasked with telling her father’s friend, who’d been bunking in the cabin, that he’d have to move.
Coping with a death of a parent is challenging enough, but selling their home can be extremely stressful for children. It’s even worse, if they die without a will. Grieving family members may be ill-equipped to make decisions, and a home can fall into disrepair. Siblings may have emotional attachments to it and unrealistic expectations about the sale price.
The job can be difficult and long or relatively easy. It depends in large part on the heirs’ ability to ask for help and hiring a professional who knows the local housing market. Experts say the sooner the process starts, the better. Parents can also take actions while they’re alive to help avoid complications. This discussion may be difficult and awkward, but it’s worth it to be informed, so adult children are not scrambling while grieving. Here are some helpful tips:
- Be certain that both parents have a will.
- Be prepared to spend some money, because there are costs associated with maintaining and selling the property.
- The executor should change the locks to keep heirs out.
- Ask a real estate agent to run a competitive market analysis and have an appraisal done by a licensed appraiser.
- Designate a contact person so the executor can keep all heirs informed.
A big deterrent to selling a parent’s house is typically the emotional attachment of the children. Experts say that while cosmetic fixes can pay off, more substantial improvements generally don’t.
Selling a family home also requires knowledge about taxes, which could be explained by an estate planning attorney. Depending upon where the home is located, there may be estate, inheritance and income taxes coming into play. There’s usually a benefit to selling an inherited property soon after receiving rights to it, because when a property is inherited after a death, the value of the property is stepped up to fair market value at the date that the owner died. Therefore, an executor may sell a property that was purchased in 1970 but won’t have to pay the taxes on the value gained over all those years.
Reference: The Philadelphia Inquirer (June 22, 2019) “With proper planning, selling a parent’s house can be a relatively painless process—or not”