Inheriting certain kinds of property could seem like a major personal boon, which is why testators might consider passing a home to one person. For someone without the income to put together a down payment on a home, receiving a house from someone’s estate could drastically change the course of their life.
Thankfully, many families don’t have to worry about a loved one struggling with housing needs. Those preparing for retirement may have adult children who may have left the state to start their own families or who have already settled down and purchased a home of their own.
It is quite common for those with well-established estate beneficiaries to instruct their executor to sell their real property after they die and distribute the proceeds from the sale among their beneficiaries. Those making arrangements for the sale of real estate during probate should understand there are two reasons that the estate may not receive what it should for the property.
The property could experience a major price slump
If the testator was the only one living at the property, it may remain empty for months or longer after the occupant dies. transferring or selling large assets often requires probate court oversight.
In the time it takes to handle their estate and arrange for the sale of the home, its value may drop significantly because it sat vacant. Additionally, the price paid for insurance while the property remains vacant will likely go up, thereby consuming more the state resources and people expected.
Family members may want to buy the home
Sometimes, one member of a family has a particularly strong emotional attachment to a property or sees it as a worthwhile investment. They may want to buy it from the estate. In fact, some testators facilitate such purchases by offering their main beneficiaries the right of first refusal.
It is crucial that executors remember that they should only accept offers that reflect the fair market value for the home. Otherwise, one family member might purchase the property for far less than it is worth, effectively depriving many other family members of the inheritance someone wanted them to receive.