Selling Your Parents’ Home After They Pass Away: Take it Step by Step

No matter how young or old you are, losing a parent is heartbreaking. On top of your grief at their passing, you must deal with the emotionally heavy task of settling their estate. For many, selling their parents’ home after death can be a daunting and exhausting challenge.


“Handling your parents’ estate after they pass away is a very difficult process,” says Ryan McKee, a Riverside, California agent and probate specialist experienced in helping clients sell their parents’ home after death. “If the sale of the house needs to also be taken care of at that same time, it’s easy for details to get overlooked.”


“Be ready and prepared emotionally for the process to begin, first and foremost,” advises Greensboro, North Carolina agent Beth Sauer, who also has firsthand knowledge as the seller of an inherited home.


If you need to sell a house you’ve inherited from your parents, you have a long to-do list in front of you. However, you can reduce some of the stress by working through the process step-by-step.









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Step 1: Establish the status of your parents’ estate




Most adult children know they’ll be inheriting their parents’ home one day, but too few understand exactly how the house will pass into their hands. You need to know the steps your parents took to give you ownership of the inherited property before you can even think about selling the house.


“You can’t just turn around the next week and put the home on the market,” says Sauer. “You have to make sure that you have the legal right to sell the home.”


You can inherit a house from your parents in three main ways: through the probate process, by a transfer on death deed, or via a living trust.


Probate




Many families mistakenly believe inheriting property is as simple as listening to an official reading of their parents’ will. That may work in the movies, but in reality, real estate inherited via a will is usually subject to the long, complex probate process.


And if your parents didn’t leave a will, then probate is pretty much a given.


So, what is probate?


Probate is a court-supervised process that oversees the dispensation of your parents’ entire estate, including the sale of the house. This is done so that the proper people are granted the right to and responsibility for the estate and so that your parents’ debts are paid as part of the process.


While probate laws vary from state to state, expect the complex process to take a while, from several months up to a year or two.


Depending on the laws in the state where your home is located, the courts may play a role in when and how the home is sold during probate. So be sure to do your probate research and enlist the help of a probate attorney.


Transfer on death deed




There is one way for the ownership of your deceased parents’ home to transfer to you as easily as it does in the movies: the transfer on death deed.


Also known as a beneficiary deed, this type of deed lets you inherit the property directly and immediately without the time, hassle, and expense of probate. With this type of deed in place, you can proceed with the sale of your parents’ home as soon as you’re ready.


However, this deed type is only valid in certain states. The laws governing these deeds vary from state to state, too.


For example, in some states, all you need is a completed transfer on death deed to avoid probate. In other states, your parents must also bequeath the property to you in their validated will, or the transfer on death deed is rendered meaningless.


Finally, while you can avoid probate with a transfer on death deed, you will still need to pay taxes on the house when you inherit it this way (more on this topic later).


Living trust




It’s much simpler to sell your parents’ house if you’ve inherited it via a living trust.


A living trust is a document designed to streamline the management and inheritance of all of your parents’ assets — including the house. The document names your parents as the trustees (allowing them to manage all assets while they are still living), and you as the beneficiary.


If you inherit property where there’s a living trust in place, you can bypass probate, avoid some estate taxes, and it sets you up to sell the home immediately.


A trust is usually the best scenario when there are multiple heirs.


“If your parents placed their home in a living trust, then the trust should dictate which heir makes the decisions regarding the sale of the house,” says McKee. | bit.ly/3XLoEJb


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