At some stage in your lifetime you may be involved in selling a deceased estate.
For many people it’s an unfamiliar process, with a long list of things that will need to be done.
Important decisions will need to be made, often in conjunction with other family members. Having experienced professionals advising you while you go through the process of selling a property that forms part of a deceased estate can make it easier. For some it can be very emotional. But hopefully with a bright and positive eventual outcome.
Firstly, here are the main points you need to know.
The role of an executor when selling a deceased estate
When someone with assets dies, they usually have a Will, which will have a nominated ‘executor’ or ‘executors’. A main role of the executor(s) is to oversee the distribution of assets going to the beneficiaries who are nominated in the will. Assets can include: Cash, Shares, Jewelry, Furniture, Motor Vehicles and of course Property.
If the assets include property, the sale of that real estate asset will have to be actioned so the proceeds can be distributed. The executor may have to sell the assets in accordance with any specific instructions in the will.
Essentially, the executor becomes the vendor of the property. They will go through the formal sale process, choose a real estate agent to manage the sale, just like any other vendor.
How Probate applies to a deceased estate
The executor must first apply to the court to get ‘probate’ to manage the deceased estate. Probate is a key legal step required before someone’s deceased estate can be administered and then distributed. It’s a court issued document certifying the validity of the Will.
Probate confirms the appointment of the executor. Officially, the probate document is called a Grant of Representation.
Grant of Representation
A Grant of Representation allows the executor (or administrator) to deal with the assets of the deceased – i.e. bank accounts, shares, managed funds, real estate – to be closed, to be sold, or transferred into the names of the beneficiaries, as per the instructions in the Will.
A Grant of Representation can be:
1. Grant of Probate – where the deceased left a valid Will.
2 Grant of Letters of Administration – where the deceased did not leave a valid Will.
3 Grant of Letter of Administration with Will Annexed – where there is a valid Will but no valid appointment of an executor. I.E. The Will may be many years old and the named executor has also passed away, without a replacement being named.
When is a Grant of Representation needed?
A Grant of Representation is needed when there are significant assets that were owned solely by the deceased. I.E. Property, bank accounts, shares (over a certain value), or an accommodation bond with an aged care facility.
Any assets that were owned jointly pass to the surviving owner, without the need for a Grant of Representation.
What is the Role of the Executor or Administrator?
After a Grant of Representation has been obtained the executor’s role (Grant of Probate), or administrator’s role (Grant of Letters of Administration) includes the following:
1. Close down any bank accounts
2. Pay off any debts, funeral costs, or other expenses
3. Make sure any gifts detailed in the Will are passed to beneficiaries
4. Sell down shares, or transfer shares to beneficiaries, following the instructions in the Will
5. Sell any real estate, or transfer real estate to beneficiaries according to instructions in the Will
6. Finalise tax affairs of the deceased person and the estate
7. Distribute any remaining funds to beneficiaries as instructed by the Will.
The administration of a deceased estate can be complicated. Some types of deceased estate can take some years to be settled – for example where testamentary trusts are established by the Will for the children or grandchildren of the deceased. Or where a life interest in an estate asset is granted to a beneficiary.
How long do Probate documents take to prepare?
The preparation of Probate documents can take up to 3 months and the grant of probate can take between 3 to 4 weeks provided there are no requisitions (objections).
While waiting for Probate to be granted, the executor can organise the required property sale documentation and get Real Estate Agents through to appraise the property (or properties) that form part of the deceased estate, and then select and engage their preferred selling agent to sell the property.
Sometimes the pre-deceased appoints their Solicitor to act as their Executor who administers the Estate. This minimizes the burden and stress and can also assist with eliminating any conflict between the beneficiaries.
Preparing a deceased estate (property) for sale
Deceased estate sales can sometimes differ from a normal or traditional home sale by the way a property is presented for sale. There may be multiple beneficiaries who have differing circumstances and various opinions. This can make presenting the home in its best light impractical or difficult to achieve. The home could be sold as is with the deceased’s furniture within or cleared and sold unfurnished.
Vendor Marketing always believes any property should be presented at its best – without over capitalising.
The best way to sell a deceased estate
With beneficiaries and stakeholders involved, a quick sale is often required for a deceased estate.
An auction is always deemed the best method of sale for a deceased estate.
Why? Firstly, an auction precipitates the sale process. In other words an auction has a timeline which is usually a 4 to 5 week process. Secondly, the aim of an auction is to provide an unconditional sale. In other words if an auction goes to plan it’s not “subject to finance” or “cooling off” such as with a private sale. And thirdly, and most importantly an auction is transparent. It provides an open forum for buyers to compete in public which means beneficiaries and stakeholders can witness the sale.
The 3 main benefits of using a Vendor Advocate when selling a deceased estate
1. Appointing a Vendor Advocate ensures independent assistance with the sale for the Executor, and protects them from criticism or any recourse beneficiaries may have about the sale process.
2. The independent and qualified assistance a vendor advocate provides will deliver a better sale result.
3. The process will alleviate the stress placed on the Executor.
Vendor Marketing – Melbourne’s most qualified vendor advocates, assists many accredited estate planning lawyers, executors & power of attorney’s sell a property (or properties) that form part of a deceased estate.
Mainly because we specialise in both Property Marketing and Real Estate Agent selection. Furthermore, we’re fully licensed and have a unique “cost neutral” fee-for-service model which clearly aligns our independent service with our client(s) – NOT the selling agent!
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