If you’re the executor of an estate, the task ahead of you will likely get complicated. It’s hard to say goodbye to someone when they pass away, and having a bunch of new and unfamiliar responsibilities can make it even more so.
Dividing up assets will be a big part of your job, and that includes any real estate owned by the deceased. While it may seem overwhelming at first, knowing what to expect can make the process a lot less stressful.
If you’re preparing to split up property as an executor, here’s what you should know…
An executor may take care of a wide variety of duties, from obtaining the death certificate to setting up the funeral. Of course, the most critical are collecting the deceased’s assets, paying their remaining debts, and divvying up what’s left amongst their beneficiaries (those named in their will).
Keeping the above in mind, you’ll have some specific responsibilities when dividing the profits from a piece of real estate (known under these circumstances as an estate home). Here are the most important steps you’ll take:
• Securing the property
• Having it appraised
• Checking that it’s insured
• Maximizing income if it’s a rental
• Selling it for the right price
Whether it’s a house, cottage, or some other type of property, you’ll want to start out by making sure it’s secure. The last thing you want is for the value of the estate home to decline. If it’s a rental property, do what you can to get rent that’s on par with what’s being charged for similar buildings or units in the area.
Last but not least, you’ll very likely wind up selling the property at fair market value and splitting the return between the beneficiaries. Here’s what that might look like.
Selling an estate home isn’t always easy. First off, you’ll need to obtain probate before you can put the property up for sale. Through this process, the will’s authenticity is verified—as is your right to act as executor. You can file for probate with the court and attain it within 6 to 8 weeks.
Be aware that if you put an estate home on the market before you receive probate, the timeline could get complicated. You won’t be able to close without it—unless the buyer agrees to make their purchase conditional on you attaining it, or they’re willing to extend the closing date.
In many cases, a loved one named in the will of the person who has passed away will want to purchase the property. They may be able to buy it for less than fair market value, so long as all of the other beneficiaries agree.
All told, administering the estate should take you no more than a year (usually less). Be aware that your work may be reviewed at the beneficiaries’ request. Through a process known as “the passing of accounts,” the courts can take a closer look at what you’ve done to ensure that it’s above board.
Lastly, you deserve to be compensated for your hard work. As a rule of thumb, executors usually take around 5 per cent of the value of the estate they’re distributing. If you have any questions about this, ask your lawyer.
Where to turn for help
Being an executor—especially when there’s real estate involved—can be a difficult job. Fortunately, there are professionals who can help make the process less anxiety-provoking.
Start by finding a fantastic legal expert. An estate lawyer can be your best friend during this unfamiliar process, so choose wisely. Do your research beforehand, get a sense of your role, and then prepare a list of questions to ask any professional you’re thinking of working with.
If you’ll be selling a property, you’ll also want to find the right real estate agent. Ideally, look for someone who has experience putting estate homes on the market. In general, they should know how to price a home accurately, be able to work with your timeline, and show sensitivity in emotionally-charged situations.
Acting as an executor comes with challenges—and rewards. Fulfilling someone’s last wishes and serving their beneficiaries can be a true honour, and it doesn’t have to be as stressful as you think. By knowing what to expect and working with the right people, you can help ensure that the process is both smooth and successful.
Are you ready to sell your home? We have the local market knowledge and experience to help. Contact us to discuss your needs today!