3 crucial steps when handling real estate as an executor

3 crucial steps when handling real estate as an executor

On Behalf of | Jun 17, 2021 | Estate Planning & Probate |

As the executor of an estate, it is your responsibility to handle someone’s property, repay their creditors and distribute property to their heirs. Often, real estate holdings are the most valuable and important assets in someone’s estate.

Sometimes, you only need to arrange for the title to transfer to the right family member. Other times, the testator expects you to sell the property to repay creditors or distribute the proceeds among family members. The three steps below can make that process easier for you.

Check the estate plan and financial records first

Before you do anything with the house, you have to know exactly what the testator wanted done with it. Their estate plan should give you explicit directions. You will need to file the document with the probate courts.

Beyond that, you also need to look at their financial circumstances. Although they may have wanted the house to pass to family members, if their debt levels are too high, that may not be an option.

Establish the fair market value for the house

What someone paid for the house years ago or the value cited on their tax bill likely doesn’t reflect what someone could get for the property on the current real estate market, which is quite aggressive.

Having an appraiser or real estate professional evaluate the home and give you an estimated fair market value will ensure that you uphold your fiduciary duty by asking for an appropriate price when you list the home.

Be cautious about transactions that involve family members

Sometimes, testators give their loved ones the first right of refusal. Unless their instructions specifically state that you should sell the property to family members at a discount, heirs and beneficiaries making an offer still have to pay a fair market value.

Otherwise, other family members could accuse you of inappropriate behavior by accepting less than the house was worth and diminishing their share of the inheritance.

Knowing the steps to sell real estate during estate administration is not the same thing as doing it, but having a plan in place will make this complex transaction a little easier for you.