What Happens to a House When the Owner Dies?
How to Make Sure the Sale of Your Property is Handled The Right Way
Once you have passed away, the process of selling your home can be complex and often time-consuming. Depending on the size of your estate and the structure of your will, it may take anywhere from a few weeks to several months to sell your house. It is important to make sure that you have a plan in place as this can help to ensure a smooth sale process for your family and beneficiaries. Safe Harbor Estate Law can help you in planning your estate and provide guidance to ensure that your house will be in good hands after you are gone.
What You’ll Learn From This Video
Why you should plan the sale of your house with an experienced estate planning attorney
When to use a Transfer on Death Deed (TOD) to legally transfer your home
How to minimize taxes, expenses, and probate costs associated with selling your house
HERE IS THE TRANSCRIPT FROM THIS VIDEO
Margaret Barrett: What will it take to sell my house after I die? That is a great question because you can save yourloved ones a lot of hassle if you plan ahead. What will happen to your house after you die depends on a few things. First of all, if your house is not intrust. If you have your home or any real estate in your estate, a probate will need to be opened so that the real estate can be sold or transferred. Probate is simply the court process by which property is transferred out of the decedent’s name into the name of other people. Now if you have a home in Minnesota and cabinet in Wisconsin, you will need to have an ancillary dupe jurisdiction probate in Wisconsin as well as in Minnesota separately. That means hiring an attorney to draft the proper documents, get them filed with the court, publish notice for two weeks, obtain Medicaid clearance, and provide notice to interested parties. After affidavits are filed with the court proving all that was done, the court will issue what’s called letters testamentary to the personal representative who will then have authority to go ahead and sell the house. One way that people like to get around probate with real estate is to use a transfer on death deed, otherwise known as a TOD. With a TOD ahead of time, you will saythat you’re transferring the property tocertain person or persons upon your death. Then if all goes well and this is recorded prior to your death, then certain papers need to be filed with the county recorder and the property will transfer to the people you designated without having to open a probate. When this works well,it works great. However, there are a few concerns with TODs. For example, one of the concerns that we’ve seen come up with TODs occurs when there is more than one beneficiary receiving the house. The way this works is as follows: let’s say you left the house to your three childrenand they were all married. All three of your children and their spouses are going to need to cooperate on deciding if and when to sell the house, who to hire as a realtor, the selling price, what to do to clean it out and fix it up, and listing it and selling, it all the issues, and then they will all need to sign the deed in order to sell the house. There is not just one person in chargebecause there’s no personal representative or probate. There’s also no money allocated to paythe expenses for the house until it’s sold. So the family members will need to come up withsome kind of arrangement to pitch in their money to pay the expenses and agree on everything.As you can imagine, this does not always work well. So if you have more than one beneficiary, you might want to think about using a TOD. It may not always be the best solution. Now, if yourhouse is in trust before you pass away, this is the smoothest wayto transfer property. Thetrustee will have the authority to transfer the house and make the decisions, put it on themarket, sell it, and distribute the funds as you designated without having to go to court. Thelack of court involvement saves at least two months as well as expenses, time, and hassle. Theonly issue to remember if you have an estate that mostly includes your home is that you alsowant to have enough money in the trust for the trustee to keep paying the house expensesuntil it’s sold and the cash out of the house materializes. So having your house in trust is thebest way to not only avoid probate, but also make sure your house or other real estate goeswho you want it to go to and the way you want it to go. If complications arise or beneficiariesunexpectedly predecease you, normally all of that can be resolved the way you want it resolvedwithout going to court. So, those are the three ways to transfer your home after you pass away.Regardless of what you choose is best in your situation, it’s important to plan ahead and havethe documents done properly. We are happy to educate you further so that you can decidewhat is best for you and your loved ones. Please call us today for a life and legacy session with a client relations specialist sowe can answer more of your burning questions about how to notleave a mess for your loved ones..
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