If you’re facing the death of a loved one, then you already have plenty to deal with. The grief, the emotional stress, funeral arrangements, visits from family and friends and much more.
Unfortunately, the passing of a family member or loved one can bring with it a range of practical and legal baggage that most people have never had to deal with before.
If you find yourself in the position where you’ve inherited a property or you’ve become the executor of a deceased estate, chances are you don’t even know where to begin.
To help out, we’ve put together a list of things you will need to think about when managing a deceased estate, including some professionals you could contact for expert guidance and advice.
Determine the legality
Before you can do anything with a deceased estate, you will need to determine who is the executor of the estate. The executor’s primary role is the distribution of assets to the beneficiaries as laid out in the will. Often, this will mean selling the estate so as to properly divide the assets if there is more than one beneficiary.
If an executor was named in the will, then that person will have to apply for a grant of probate to manage and distribute the deceased estate.
If an executor was not named, then a family member will have to apply to be executor in probate court, and this can take time.
Remember, nothing can legally happen with a deceased estate until probate is in place.
Most people are unaware of the complexities involved in managing a deceased estate, so it can help to seek advice from experts including lawyers, accountants and deceased estate management companies.
Understand the tax issues
When someone passes away, there are some important tax and superannuation issues that need to be resolved. For example, the ATO needs to be notified of the death and a tax return submitted for the deceased estate.
When it comes to dealing with a deceased estate, it’s also important to understand the tax implications from the point of view of the executor and the beneficiaries. Capital gains tax and the three-year rule can affect the decision whether or not to sell a property. They can also have a significant impact on when it might be most financially prudent to sell. The ATO website provides a comprehensive overview of the tax regulations that affect deceased estates.
Seeking advice from the ATO, an accountant or a tax lawyer will help to determine the prudent course of action in this situation.
To sell or not to sell
Once you have probate in place and understand the legal and tax issues surrounding the deceased estate, the executor is then in a position to decide whether or not to sell the property and other assets.
As already mentioned, selling an inherited property has significant tax implications, so it’s advisable to contact an expert to help you understand the most favourable tax outcome.
Other factors that may affect your decision to sell the property include the housing market conditions, the expected cost of property repairs and upgrades, and the number of beneficiaries.
A reputable deceased estate management company can provide you with valuation services, help you understand the market conditions and determine what work needs to be done to the property to command the best possible selling price.
If you decide not to sell the property, then you can either rent it out or live in it. Both courses of action require further work and, of course, come with tax implications.
Clean it out
Regardless of what you decide to do with the property, in most situations, the furniture and possessions will need to be removed and the property cleaned and repaired. Deceased estate cleaning can be time-consuming and, in some case, emotionally difficult.
A quality deceased estate management company can take care of cleaning out the property. They can provide complete inventory management for deceased estates, which includes documenting and photographing all personal items, providing valuations for larger items, removing rubbish, and handling all disposal, recycling and charity donation of unwanted items.
They can also organise the clean-up of the property inside and out, as well as any rubbish removal and repairs and maintenance that may be required.
Preparation and Presentation for Sale or Lease
If you’re planning on selling the property or renting it out, then the property will need to be prepared and presented for sale/rent. Besides thoroughly cleaning the property, this will usually also involve landscaping and yard preparation and rubbish removal. The property may then need to be temporarily furnished if it’s going to be put on the market for sale.
Deceased estates typically require significant repairs and renovations to get the best sale price. A licensed property inspector can advise on what repairs and renovations may be required before putting the property on the market. You will then need to work with tradespeople and contractors to carry out the repairs.
Alternatively, a deceased estate management company can organise the property inspector and liaise directly with the tradespeople to ensure all necessary work is carried out. They can even engage a quality real estate agent to prepare the property for sale and put it on the market for you.
Don’t try to do everything yourself
Managing a deceased estate can be overwhelming, especially during a period of grief. It can also be extremely time-consuming working with so many different advisors and agents (e.g. real estate agents, accounts, lawyers, building inspectors, tradespeople etc.).
Take some of the stress out of this already trying time and contact a reputable deceased estate management firm, like Deceased Estate Property Services. They can take care of the hard work, leaving you time to do what matters most: spend time with your family.
Mike works as an outreach manager for many property and real estate businesses. His expertise lies in finance, safety products, and real estate.