What do I need to consider when selling property in probate?
When you are selling a house in probate, there are certain considerations that need to be made. Probate is the process in which someone applies for permission from the court to deal with a deceased person’s estate which can often include selling their home.
The executors of the Will are responsible for selling the property unless the beneficiaries of the Will want to have the property transferred into their names instead.
Executors and those in charge of winding down the estate must consider the following points when selling a house in probate:
Has the Grant of Probate been approved?
Technically, you cannot complete a sale of a property before getting the Grant of Probate and an application for probate can take a while to process.
The Grant of Probate allows the executor authority to proceed with distributing and handling the assets within an estate, including property. The standard processing time is said to be around 8 weeks, although realistically, this can be longer if there are complications.
The house can be marketed and the conveyancing process can begin, however, the buyers should be aware that you will be waiting for probate to complete before you can complete and exchange contracts.
Have you obtained separate property valuations?
When selling a property in probate, you will need to consider arranging a number of valuations to get an understanding of how much the property is worth.
Having a few valuations will help to get a range of estimated prices. The valuations will be required when applying for probate as the executor will need to outline the deceased’s total assets and liabilities in order to calculate the Inheritance Tax due.
Are you keeping the property secure?
It is the responsibility of the executor to keep the property secure and safe whilst it is not being lived in.
Both the probate and conveyancing processes can take a while which means that the property is potentially exposed to damage, dampness, vandalism, and fraud.
The executor can be personally liable to the beneficiaries and creditors if something happens to the property which results in it losing value for instance.
Taking care of the property includes ensuring that the correct insurance is in place and that the property is not exposed to any risk of fraud. In addition, this can also include making sure that the heating is turned on in winter to avoid burst pipes or damp developing.
Capital Gains Tax
If it takes some time to sell the property after the Grant of Probate has been given, there may be a chance that the value of the property has increased since being valued.
This can happen when there has been a particularly long wait for probate to go through and especially in a rising property market. Executors will need to be aware that there may be a liability for Capital Gains Tax in this case.
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