Selling a probate property and being an executor
If you are named in a will as an executor, this guide will provide some useful information and guidance on selling a probate property and responsibilities and duties placed upon you. It is up to you to organise the valuation of the assets of an estate, pay off any debts or liabilities and calculate and pay any inheritance tax (IHT) and distribute the estate in accordance with the will. Unless the beneficiaries named in the will to have the deceased property transferred into their names, you as the executor will need to sell it.
TOP TEN TIPS …
1.Obtaining a Grant of Probate
If the deceased owned the property in their sole name, you will need to obtain what is known as a ‘Grant of Probate’.
This is a legal document issued by the courts which confirm the validity of the will and names of the executor/s who has the legal responsibility and authority to deal with the estate. Just bear in mind, the Grant of Probate can take 3 months or more, so this timescale is a consideration when looking to sell a property.
Probate can take up to a year, if the estate is complicated or contentious.
There is nothing stopping you putting the property on the market and accepting a sale prior to the Grant of Probate is issued, however, the Grant of Probate must be in place prior to an exchange of contracts.
There are some advantages to buyers, the fact its chain free and probate properties normally need updating or modernising so tend to be well priced.
2. Obtain a Probate Valuation
As part of the process of applying for the Grant of Probate, you will need to obtain a valuation for the deceased property or properties. This needs to be the value of the property on the date the owner died, rather than a marketing price or a selling price based on a later date.
Clifftons Estate Agents provide probate valuations in the BH postcodes. Tel: 01202 789699.
3. Check the title and deeds
It’s worth checking the properties title, whether its leasehold, length of lease, whether there are any restrictions, outstanding mortgages or charges. It could be someone else legally owns a share in the property or defects in the title. We work closely with local solicitors and happy to put you in touch with a local firm dealing with probate.
4. Check the property is insured.
As executor, its worth checking the property is properly insured. Some insurers can decide not to pay out on claims if the policy is still in the name of the deceased, so contact the insurer and ask them to amend the name on the policy. You also may need to inform them the property is empty, especially if it is more than 30 days. Equally, contents insurance maybe an issue and it might be worth removing valuables, however, speak to all executors and beneficiaries.
5. Clearing the Property
As executor, the property will need to be cleared and this can be time consuming due to memories, however, often the property presents better vacant.
6. Can the executors sell the property, without the beneficiaries agreeing?
It is always advisable to have an open and clear communication from the outset, and a good idea outlining verbal conversations in an email. Unless the Will states otherwise, there are no special provisions for beneficiaries to sign off the estate sale. However, if a property is sold below market value then there is the possibility they could sue the executor.
7. Selling for Open Market Value
As an executor, it is your obligation to obtain open market value. There are a couple of routes, the normal private treaty route through an estate agent or the modern property auctions which buyers bid and the winning bid has 28 days to exchange contracts, this increase the chances for a guaranteed sale and in most cases a quick sale. Clifftons offer this service.
8. Other considerations
There may be some other considerations, gardening in the summer or heating in the winter. As an executor, you are entitled to do works or improvements within reason but it is advisable to inform all beneficiaries or other executors before spending the estates money.
9. When is a Grant of Probate not required.
Probate is not always required on small estates up to £5,000 and can legally be transferred without going through the probate process.
10. How much does probate cost and the probate application fee?
In 2019, the application fee is £215 or £155 if using a solicitor or probate specialist. The other consideration is the solicitor legal fee or probate specialist, which is normally 2% – 5% on the value of the estate. Banks can also do probate but tend to be more expense. A probate specialist tend to be the best value and this cost is normally paid for by the estate.
The law society guidance states an initial fee of 0.75% of the value of the property, plus 1.5% of the value of other assets, and other charges on top of that. Obviously, the more complex cases can make probate costs higher. Normally, they will provide a detailed fact find questionnaire to provide you with an idea on the likely legal costs. Specialist probate solicitors can provide a fixed fee in certain circumstances. If you are looking for a Probate solicitor in Bournemouth, Poole or surrounding areas, we can put you in touch and help you with this.
Inheritance tax needs to be paid to HMRC once the estate has been settled if it is worth over £325,000.
If you need any further help or assistance on this, please do not hesitate to contact us. Tel: 01202 789699.
(Written by James Scollard, CLIFFTONS )