When property is owned by a deceased person it is managed by the appointed estate administrator or executor of the will who has legal authority over the assets. It cannot be sold until probate is complete. Property can be a minefield in some cases; there are various tax implications that prompt beneficiaries to opt for a quick-sale, making them an attractive proposition for investors. It is also common for disputes to arise over whether or not to sell.
Firstly, the administrator must apply for a Grant of Representation to handle all the outstanding debts and tax before the rest of the estate is allocated in accordance with the decedent's will. For advice or help with your application, call free-phone 0800 612 6105.
The property of the deceased will normally be the most valuable asset in their estate. It will need to be valued as part of the probate process. This is not because it is to be put on the market but for inheritance tax purposes. The administrators must determine the 'open market value' of the property. You'll need to have calculated whether or not the estate is excepted (liable for inheritance tax or not), to complete probate forms.
It is recommended to use a Chartered Surveyor when dealing with probate and property. Thus, ensuring the house is not overvalued, especially in the current climate, resulting in unnecessary inheritance tax liability. Plus, HMRC are more likely to accept a valuation if it is provided by a professional.
If there's a Will
The property can't be sold until the Grant of Probate has been issued; at this point the executors have the title to the property. It is often the case that the beneficiaries of the will want to sell quickly. It is possible for executors to arrange for contracts to be exchanged before the Grant of Probate has been obtained. They can do this as they are in effect, protecting the deceased's estate. The contract will state that completion will only take place after the Grant is issued.
Without a Will
If there is no Will, the estate administrators cannot do anything with the property until the Letter of Administration has been issued, this includes putting it on the market for sale.
Inheriting a Property
There are certain legal and financial implications you must consider when you inherit a property. Providing it isn't necessary to sell the property to pay off debts or taxes, then the executor will ultimately transfer the title into the names of beneficiaries.
Once the probate process is complete you can decide whether or not you wish to keep the property or put it on the market. Many beneficiaries opt to sell, they may live in another town or Country or they simply don't have the financial resources to keep it.
You need to consider the tax implication; Capital Gains tax means you're obligated to assign a substantial percentage of your inherited property's value to tax. If you cannot afford to pay this tax and keep your inherited property, you may have to sell just to cover the bill.
If the state of the property has declined over the years, it may require a considerable amount of money spending on it. If it's left empty, your asset could quickly turn into a liability; insurance payments, maintenance, burst pipes in winter are just some of the financial downsides.
It is common for property disputes to arise; one beneficiary may be anxious for a sale whereas the other wishes to rent out the property in the hope that its value will increase. Any such disputes will have to be resolved by the court.
These issues are complex; it's always better to get legal advice or have professional take care of all probate issues. IWC offer a complete service for a low-cost fixed fee, call us for a free quote on 0800 612 6105.
Buying Probate Properties
You may also be interested in property as a buyer. Probate properties have many advantages that make them attractive to investors. Due to some of the aforementioned reasons, beneficiaries often opt for quick sale and they are willing to accept an offer lower than the market value. It's also easy and quick; the property is more than likely empty and at the end of the chain.
Use this form to find details properties where the estate is currently going through the Probate process.These properties and the probate work will be at varying stages. If you are interested in receiving more details with regards any of the properties you see email firstname.lastname@example.org