Dealing with a death of a loved one is never easy. Managing property within an estate comes with additional consideration for the Executor.* Realtors are often involved as well, helping family members cope with their loss, as well as how to best handle not only a large financial asset, but also a place of personal meaning for relatives.
There are a number of things to be aware of in this situation. When listing the property, the Seller’s Disclosure Statement for an Estate Property will need to be completed. Because the Executor may not be familiar with the property, it can be helpful to review this disclosure with an attorney.
The Title Company will look for additional assurance of correct title and responsibilities. Handling these items can take extra time, which should be taken into consideration. They will ask for a separate estate questionnaire and a special Estate Affidavit of Title.
Family members often have high emotions regarding a home and the property therein. There are numerous potential pitfalls here, including moving out relatives who may have been living in the property, lawsuits by unhappy family members, beneficiary or court approval for the sale and other issues. The Executor/Administrator should make every attempt to have the property cleaned out and vacated, with family members and beneficiaries communicated with as transparently as possible. This will lessen, but not eliminate, the risk of lawsuits.
In addition, there are situations where properties are embroiled in reverse mortgages or insolvency situations that require legal action to clear title prior to sale.
Finally, while New Jersey’s recent estate tax laws increased the minimum estate value that is taxable, the Title Company may require a Tax Waiver from the State or require monies be escrowed to cover potential taxes at closing. Post-closing, it is important to make sure the Tax Waiver comes in and any escrow funds are released.
Managing the nuances, emotions and special circumstances related to selling real estate held in estates takes additional time and knowledge. Working with an experienced estate administration attorney can be helpful. If you have any questions contact us. Jeffrey Apell, Esq., Estate and Real Estate Attorney, and the Posternock Apell, PC are here to help.
*If an Executor hasn’t been named or there is no Will, the court will appoint an Administrator. An Administrator is likely to be familiar with these issues, but real estate professionals are wise to understand the issues themselves.