As the named executor of your loved one’s last testament, there’s no denying that a considerable amount of expectation falls on your shoulders. In some cases, it’s an undesirable position to be in, but an important one, nonetheless. Typically, you may be tasked with the sale of the deceased person’s home, after which the sale proceeds must be distributed accordingly and fairly. However, the process entails more than simply calling a realtor and putting the home on the market.
Understanding the Role of an Executor
Selling an inherited home is just one of the boatload of responsibilities of an executor of a will. In reality, this role carries a multitude of obligations that demand careful consideration, legal advice, and time. The executor must ensure that each beneficiary receives their respective share of the balance. The estate is administered as per the law, and the decedent’s creditors receive payment from the estate. The underwriter will give the executor the go-ahead to use the proceeds to clear funeral costs and other personal expenses. If the executor needs or wants the funds before one year elapses, they can receive them at a stipulated cost of 2% per $100,000 sales price. It translates to $16,000 on a property worth $800,000, for instance. The fee goes to the underwriter to factor in the risk they are undertaking for the early release of the funds.
In some instances, the executor is also the beneficiary of the estate. If that’s the case, it’s essential for you to meet the executor’s obligations without a conflict of interest, more so, with several beneficiaries involved. Upon anticipating conflict, we recommend finding another party to serve as the executor. It’s worth noting that an executor’s role differs from one state to another in the US. If you’re not familiar with asset distribution or probate law, it’s advisable to hire a probate attorney for assistance. They’ll draft the required documents and appear in court on behalf of an executor. When it comes to the sale of a home, an executor has crucial responsibilities. For instance, they must ensure the property’s safety and keep it in tiptop shape until it’s sold. It entails securing valuables, updating the locks, and the acquisition of insurance. Additionally, you must maintain the home and collect rent from tenants until it’s sold.
• Managing the testator’s assets and property until they are distributed to beneficiaries
• Supervising the distribution of the testator’s property and assets
• Handling property and asset inheritance, including who inherits real estate (as indicated in the Will)
• Validating the Will in probate court if needed
• Paying for debts, taxes, and other ongoing expenses
In short, the executor makes the majority of the decisions regarding the distribution of the estate. Although they must follow the instructions in the deceased’s Will, sometimes they do have the power to make certain decisions. If the testator did not express their wishes clearly or at all in their Will, then the executor might have to make some decisions on the testator’s behalf. Keep in mind that the executor can also choose to refuse to act even if they are named in the Will. In these cases, the court can appoint a new executor.
Things Your Executor Can’t Do
An executor has the fiduciary duty to execute your Will to the best of their ability and in accordance with the law. But when choosing an executor, it can be difficult to determine the limits of their powers.
However, here are some examples of things an executor can’t do:
• Change the beneficiaries in the Will
• Stop the beneficiaries from contesting the Will
• Sign the Will on behalf of the testator, if it was not signed before the testator passed away
• Execute the Will before the testator has passed away
If the beneficiaries of the Last Will feel that an executor is not performing their duties, they can get the court involved. Sometimes the executor can be removed. In this case, the court will usually take care of the executor’s duties in place of choosing a new executor.
Approximately How Long Does an Executor Have to Sell a House?
An executor’s timeframe to sell a home isn’t cast in stone as it differs from one state to another in the US. There’s no universal duration, only what the probate process dictates. Therefore, upon submitting a will to the probate court, your goal is to sell the house before the probate closure.
As an executor, it’s essential to understand the basics of probate. It’s essentially the process of a court going through the estate assets and using them to clear outstanding taxes or debt. It also involves making sure the remaining estate assets are distributed according to the will. Probate can be a lengthy process that usually lasts up to two years after the estate owner’s death. Nonetheless, not all the assets (as listed below) will go through probate. The following can be disbursed outside probate.
• Assets held in a trust
• Assets designated to a valid beneficiary
• Jointly-owned assets that are transferable to a surviving owner
An Executor as a Non-Beneficiary vs. Beneficiary
The timeline for selling a house is also based on whether the executor is a beneficiary or a non-beneficiary. If the deceased left the house to you and named you as the executor, you have free rein to rent it, transfer ownership, or sell it. If the executor is the homeowner, there’s no timeline to sell it. If you’re faced with the responsibility of selling your parent’s home according to the terms stipulated on the will, you must acquire approval from the probate court. At this point, you have the authorization to execute the real estate documents to transfer the title to the property. Alternatively, you can sell the home and receive the proceeds as a beneficiary of the will. However, if you’re a non-beneficiary or personal representative and the will mandate the home to be sold, you have no choice but to sell the house. The executor can buy the house in an ‘arms-length transaction’ at its fair market value, after which the proceeds must be distributed to the beneficiaries of the estate. In this scenario, the executor must receive consent from the beneficiaries.
Taking Control of the Home
As mentioned, the responsibility of taking control of the house falls on the executor’s shoulders. It ensures the estate property remains in good hands and in excellent condition for a decent sale. When a home is empty or vacant for a period of time, the executor will have to swap out the locks, change the mail delivery address to theirs, and maintain the estate. Additionally, rerouting the mail is a convenient way of receiving the required documents to settle the estate in its entirety.
How to Sell a House as an Executor
Although the process of selling a home as an executor is standard across most states in the US, the probate processes and laws may vary. It’s these differences that can significantly impact the timeline on the sale of the house. Nonetheless, here’s how to sell a home in each steps.
Step 1: Will Submission to the Probate Court
Filing the will with the probate court to validate its authenticity is the first and most fundamental step. It’s only after getting the ball rolling with the probate court that you can go ahead to take control of the property and prepare to put it on the market. Once you receive the deceased’s will, you have 30 days to file with the probate court. Keep in mind that filing a will with probate isn’t always mandatory. However, it’s a requirement when legal ownership of an inherited home is passed on. If you’re the sole beneficiary of the house, you can be granted permission by the court to sell the property while it’s in probate.
Step 2: Decide On the Most Ideal Way to Sell the Home
If you’re having reservations about putting the property on the open market, you should. As an executor of an estate, it makes you a fiduciary as well. In scenarios that call for loyalty, trust, and honesty, a fiduciary refers to an entity with the legal obligation and power to act on behalf of another. Therefore, it’s in the best interest of other beneficiaries that you sell the house at a profit. Additionally, you must make a decision that revolves around the most ideal way to sell the home. For instance, if you need to sell the property relatively quickly, you can enlist the services of a hassle-free home selling service that guarantees a quick turnaround time. If you opt to work with a real estate agent, it’s your responsibility to ensure they have adequate expertise in selling inherited properties. (This will of course also cut into the bottom line when you account for sales commissions.)
Step 3: Submission of a Signed Contract to the Probate Court
Upon finding a suitable buyer for the house, it’s essential to get a signed contract of the deal and hand it over to the probate court as soon as possible. You can also include a copy of the buyer’s offer to get approval from the court to close the sale. It’s worth noting that if the property is left to several beneficiaries, you require approval from each for the sale to go through. They must sign a waiver that gives their consent to the offered price. After submitting the documents, the court will review them and give a verdict.
Step 4: Get the Approval of the Court and Close the Sale
At this stage, you’re essentially awaiting approval of the sale from the probate court. It’s only after receiving authorization that you can close the sale of the property. Closing the deal entails signing an executor’s deed on behalf of the estate in your role as the executor. As always, two or more beneficiaries are involved. You must acquire their signatures of consent to close the deal.
Step 5: Receive and Allocate the Proceeds
Once you put the property up for sale, the next course of action is to create a separate bank account. The proceeds from the sale of the house must then be allocated accordingly. Keep in mind that you’ll need to clear the creditors’ outstanding dues, including any existing liens, after which the balance of the proceeds must go into the created bank account. If you’re the sole beneficiary, the remaining funds can be transferred to your bank account once the outstanding debts have been cleared. Typically, you’ll receive a check from the title office, who handled the sale of the property. Made payable to the estate, the check can be directly deposited by the probate court or the executor. How you receive the proceeds is solely based on the ruling of the judge and probate court. If the property’s sale is processed through probate court, the proceeds are sent to your lawyer’s trust account. If you opt not to go through probate court, each of the beneficiaries must sign and consent to how the funds will be distributed.
Executors Of An Estate: Can They Be Paid And How Does It Work?
An executor of an estate is someone appointed by the Will maker to administer their estate. This involves collecting assets of the estate, paying any taxes and debts of the deceased, and then distributing the remainder of the deceased estate according to the terms of the Will. Being an executor of an estate can be a challenging and time-consuming task. The executor’s commission is a commission awarded to the executor for their role in administrating the deceased estate. This includes the pains and troubles that they may have suffered by taking on this responsibility. This commission can be paid to the executor of an estate if certain requirements are met. It is not an automatic right. If an executor is a beneficiary under the Will that they are administering, then it is very rare that the Supreme Court will also award executor’s commission. It is the court’s view that being a beneficiary is sufficient and therefore no commission is needed in most cases.
Your best next step is to contact the law firm of Ascent Law for legal help in the administration of the estate. We want to help you.
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