Estate planning is a complex decision-making process to ensure that your loved ones will be taken care of when you pass away, and the transfer of properties will be done with ease. Once your heirs receive a personal property, they have the option to move in, rent it out, or sell it. When beneficiaries decide to sell your property, later on, your estate plan decisions will impact the process they’ll have to go through. This guide provides an overview of how inheritance is sold depending on whether you chose to establish a will, a trust, or a complete estate plan.
If you haven’t decided on which option is best for you, get in touch with an estate planning lawyer to help you choose between wills, trusts, or estate plans to ensure maximum benefits for your family.
Prerequisites to House Selling
Transfer of Ownership. Transferring your home to a surviving spouse, child, or grandchild can be complicated with legalities in estate planning. You have the option of placing your legacy in a living trust and having it owned by a trustee or opt with a last will and testament where the transfer of ownership only takes place at the owner’s time of death.
If the property is listed in your will, the home recipient will need to go through a probate process where the court will formally recognize your will as legal and in effect, before they sell a home. On the other hand, under a trust, the trustee is liable to handle the process of selling a house until ownership has been transferred to the new owner.
Property Valuation. Once legacies are passed down successfully, the new owner will need to arrive at a reasonable selling price for any potential buyer. Although there are online calculators to check what your home is worth, property inspections can be done by inviting a home inspector to assess the value of property inheritance.
Factors that will be considered in calculating the value of your home are the following:
- Current house conditions: Is the home for sale good for occupancy or in need of repairs?
- Local market demand: Are there other competitors selling the home at a lower sale price? How is the housing market?
- Outstanding property taxes or debts: Is the property subject to gains tax? Do you still owe mortgages on the home? Is it at risk of foreclosure?
An estate planning attorney can help you estimate how much the person inheriting your home will have to pay for once they receive your ‘gift’ based on your state laws. An estate attorney will likely discuss tax exclusions or exemptions for individual homeowners and married couples, whether your home will be taxed when selling is done, fair market value, the needed paperwork, and if inheritors can avoid high property taxes.
Preparations before the sale. Before your home becomes listed by real estate agents and visited by potential home buyers, your descendants will have to clean out all your personal belongings. You may be wondering who will be legally responsible to supervise all transactions before putting that “for sale” sign. If you establish a will, the executor will have authority over the selling process, while the trustee will be responsible for inheritances under your trust.
Avoiding Obstacles in Home Sale
To help you decide how to secure your wealth and assets, consider the following hurdles commonly met by individuals when deciding to sell the property received from the decedent.
For legacies listed in wills, some challenges include:
- Properties are kept by executors for years while in probate.
- Recipients are using the home only temporarily while waiting for ownership transfer and the legality of your will.
- The will is being challenged by another family member or revoked.
- For inheritances passed on to siblings, equal distribution can lead to disagreements especially when selling a home.
Giving up the very place you’ve stayed for a long time to ensure that your loved ones are cared for when you die is a benevolent yet complicated decision. Although you may be tempted to think that it is the same as transferring the key to a car, in reality, there are legal hurdles that must be considered to make sure that the transfer won’t add to the emotional turmoil your relatives will likely go through after your death.
To arm yourself with the correct knowledge on estate planning and ease the potential burden on those who will inherit property from you, schedule a consultation with one of Entrusted Estate’s estate planning attorneys in Michigan. By putting your trust in us, you can rest assured that your legacies will be taken care of until the moment it is passed on to your beneficiaries.