When a person passes away, the executor of their estate will have to make sure that debts are paid and taxes are filed. Family members are left to administer an estate and may be faced with the question of how to sell a property.
It is important to know that there are certain legal duties that executors have toward the estate, including the need to keep records, file returns and pay taxes. They also have to deal with claims by creditors, taxes, beneficiaries and the costs of running the estate. It is important to understand what these requirements are so that you can make plans for how you are going to meet them.
Still, the most important job of an executor is to sell a property on behalf of the estate. In that case, the executor should:
1. Have the Property Appraised
An executor should have the property appraised formally, which may be done by a real estate agent. That is if the executor seeks a market appraisal.
On the other hand, the executor may also be valued instead, which is more aligned to a bank valuation. Therefore, it’s lower compared to a market appraisal.
2. Make Sure the Property Name Has Been Transferred to Their Name
The executor needs to acquire probate for the property to be transferred into their name. However, in Queensland, there’s an exception—suppose a property is the only asset of the estate, the absence of probate is allowable and the name will be transferred to the executor’s name.
3. Deal with Mortgages
If the property is registered with a mortgage, the executor needs to address this. In case the mortgage has been paid, the mortgage can be discharged from the property. On the other hand, an executor needs to have a clear understanding of the estate’ assets and liabilities to sort them out effectively, specifically any registered mortgages.
4. Seek Advice
Executors are expected to seek advice when selling the property. Therefore, a real estate agent will be helpful at a time like this because they can help an executor identify the best method to sell the property. It’s also crucial to have the advice in writing should the beneficiaries ask about the method of sale.
Executors work on behalf of the beneficiaries. Therefore, an executor should take the necessary steps that will benefit the beneficiaries. Suppose the property is sold at an auction, an executor should disclose the reserve price set for the auction.
On the other hand, it is also the job of an executor to maximise the value of the property, which means that there may be instances when disclosing the reserve price may not be in the best interest of the estate.
Knowing how an executor works when selling a property of an estate is vital. The executor will act on behalf of the estate. Therefore, knowing full well the responsibilities can help ensure the right decisions are made.
When selling an estate’s property, you need to have the right people to assist you. So take the time to find the right one.
Let the best Australian property lawyers in Ipswich help you! GLG Legal Springfield specialise in property and succession planning. Book your consultation by calling us at (07) 3288 3511.