When a person dies, there are formalities that need to be followed to deal with their estate and finalise their affairs. If you have inherited a property, due to being the beneficiary in a Will, or under the Intestacy Rules, you may be wondering how and what you need to do to formalise their property. In this article, our Probate Solicitors in Preston discuss what steps you need to take before selling or transferring property belonging to someone who has sadly died.
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What is an inherited property?
An inherited property is a property that has been passed to you after someone has died. If the deceased owner left a Will, the executor of the estate has the right to deal with the property. They will need to prove their legal authority, by obtaining a Grant of Probate. Once they have this, the executor will be able to sell or assent (the formal word for this type of transfer of property) the property to the beneficiaries.
If the deceased owner of the property died without a Will, the Intestacy Rules dictate who benefits from their estate and thus who receives the property. As the estate is intestate, the administrator will need to deal with the estate, applying for Letters of Administration before selling or assenting the property.
Can I sell an inherited property?
If you are the executor or the administrator of a deceased person’s estate, you would be entitled to sell or assent the property, once you have the necessary legal document to prove your entitlement, being Probate. However, in some cases, especially where the executor of the estate is not the same person as the ultimate beneficiary, or where the administrator is not the only person entitled to the estate, it is best to seek agreement from all beneficiaries about what they want to do with the property before you take any action. This is because, in some circumstances, the beneficiaries may agree that one person will inherit the house, and the others will receive the equivalent in cash, or the beneficiaries may simply transfer the property into their names, and then rent it out. The decision reached could depend on the other assets in the estate, and the position of all the beneficiaries financially.
The only exception to the requirement for Probate is when a property is owned as joint tenants. In these cases, the surviving joint owner inherits the whole property under the doctrine of survivorship, and therefore they can simply evidence their entitlement to the property by proving the surviving co-owner has died.
Are there limits on selling inherited property?
There are no limits on how an inherited property can be sold; you may decide to sell the property on the open market (using a local estate agents), you may agree a private sale with someone you know or through private advertisement, auctioning the property may be the best option, or you may decide to contact a private property buying company to see what offer they would make you.
It's up to the executor or the administrator to decide which is the best option for the property, based on the current climate and what is best for the beneficiaries of the estate. This goes back to another benefit of consulting with the beneficiaries of the estate first, and obtain their perspective on the best way to proceed.
What price is a fair price for the property?
Our Probate Solicitors in Preston are not experts at valuing property; we are just experts in dealing with the legal process of obtaining Probate and selling the property on behalf of the estate.
In general, before Probate is obtained, any property should be valued by three estate agents, when the estate is under the Nil Rate Band allowance. If the estate is taxable, or is over the tax-free amount, our Probate Solicitors recommend having a valuation carried out by a RICS Surveyor. The Executors and Administrators of an Estate have a duty to ensure an accurate valuation of a property is provided on the inheritance tax forms, and the type of valuation should be appropriate to the type of property, too. For more niche properties, such as farms, country houses, or other more unique properties, RICS Surveyors may be recommended to ensure that the characteristics of the house are considered in any valuation.
Once you have received the valuations, you do not need to necessarily choose the highest or the lowest one. As the person legally entitled to deal with an estate, you can choose not to proceed with any of the valuations, or set what you believe to be a fair price yourself. However, our Probate Solicitors in Preston would explain that whatever price you choose, it should always be in the best interests of the estate and the beneficiaries due to receive the proceeds of sale or the residuary estate. You cannot, for example, sell the house to yourself, as executor, at an undervalue, just because you are the executor, or to your relative, as this breaches the fiduciary duty you owe to the estate and the beneficiaries.
Does the property have to be sold?
No. If there are two or more beneficiaries of the estate, and they would prefer for the property to be transferred to one of them (with an equivalent part of the estate being paid to the other) or to be transferred into joint names, this can also be done. If there is only one beneficiary, the house could be transferred to them outright, if this is what they want, and if it is possible for the estate to discharge all other liabilities and expenses out of the cash available. If there is insufficient cash, the beneficiary could receive the property and discharge the other liabilities out of their own funds, rather than selling the house.
These kind of steps should only be taken once you have sought professional legal advice, and you are aware of all the potential financial and other factors before you decide to proceed.
Will Probate be required if the property is not being sold?
Even if the property is being assented and not sold, Probate will still be required in order to take effect to the transfer. This is because HM Land Registry will require sight of this document, as proof of who is entitled to deal with the property before they take steps to formalise any transfer on the Deeds.
How can I obtain Probate?
Contact our Probate Solicitors in Preston who can deal with the application for Probate on your behalf. Our team offer excellent fixed fees and have over 35 years’ experience in dealing with Probate applications on behalf of the loved ones of a person who has passed away.
You can speak to the team by calling 01772 783314 or email wills@mglegal.co.uk to speak with the team about your loved one’s estate. Read our team’s 5-star reviews, here.
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