Estate Planning Essentials: A Beneficiary’s Guide to Selling Real Estate After a Loved One Dies

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No one wants to plan for the day when a loved one dies. Not only is it rather morbid, but it can also be overwhelming – especially for those who have a complex estate. In the midst of grieving your loved one’s loss and making funeral arrangements, you may also be responsible for finalizing their estate, which could include inheriting real estate.

As an estate planning and elder law attorney, I see this situation a lot: A group of siblings have inherited their parents' summer home and have decided they want to sell it. So, what does that process look like?

First, you’ll need to determine whether you have the legal authority to sell the home. The home can be inherited through probate, transfer on death deed, or via a living trust. Each state has specific rules about how the home is transferred, but there are a couple of general things to keep in mind.

If the home is in a trust, only the trustee is able to sell the house and must have possession of all the trust documents. If the home is left in the children's names, all children named must agree on the sale and be present at closing. If they don’t, an attorney might need to get involved. If the death was unexpected and the home is still in the name of the deceased, it will need to go through probate before a it can be listed for sale.

Once you’re able to sell the home legally, you’ll want to determine whether or not the home has a mortgage. If there’s a mortgage on a home you’ve inherited, you’ll be responsible for making those payments. It’s important to note the mortgage must be in your name before it can be sold, so be sure to contact the lender to work out that transfer. If the home doesn’t have a mortgage, there are obviously no payments to make. However, utilities and property taxes will still need to be paid.

In addition to checking for a mortgage, you’ll also want to see if there are any liens or encumbrances out on the home that need to be taken care of. If there are, those will need to be paid off. If you inherit a home with debt, you’re inheriting the debt as well. The lien could be paid through the estate, if applicable, using proceeds from the sale, or out of the beneficiaries’ pockets.