If you are an executor or administrator handling a deceased person’s estate, there will usually be a home or other investment property to distribute as part of the process.

The following are 6 steps an executor should consider before attending to the sale or transfer of property from a deceased’s estate.

Step 1 – determine type of ownership of the deceased’s property

When dealing with a deceased person’s property, the first thing to do in the estate administration process is to determine how the property was owned.

If the deceased’s home is held jointly (as joint tenants) a copy of the death certificate is required as proof of the death and lodged with the Titles Office. In this case, the deceased person’s share is not an asset of the estate to be distributed – rather it passes to the surviving party.

However, if the deceased person owned a property outright, or with a partner or someone else as ‘tenants in common’, their share of the property becomes an asset of their estate.

In this case, their share will eventually be either sold or transferred to the appropriate beneficiaries for distribution according to their Will (or in accordance with the rules of intestacy if they did not leave a Will)

Step 2 – Read the Will

The executor will need to read the Will carefully to ensure that property is distributed in accordance with the wishes of the deceased.

This is generally straight-forward; however, sometimes Wills are ambiguous and contain complex formulas for working out the respective shares or assets that the beneficiaries are to receive.

The Will may also establish one or more testamentary trusts which will require ongoing management and administration.

If there is uncertainty regarding the terms of the Will, or in calculating the beneficiaries’ respective shares, then appropriate advice should be obtained.

Step 3 – Clear the home and keep a schedule of the of assets and value

Before removing any personal belongings, the executor should take an inventory of the contents to determine the estate’s value.

All the household and personal chattels of the deceased will form part of their estate, so the executor and other surviving family members need to be careful before removing items, especially if the estate is being disputed by other beneficiaries or family members.

Step 4 – obtain a valuation and maintain insurances for the property

If a property is to be distributed to beneficiaries, its value may become important to help determine an equitable and fair distribution of assets if there is more than one beneficiary.

Whether you decide to sell or retain the property to transfer to the beneficiaries, a formal valuation or market appraisals must be obtained.

Paying for a professional valuation may be the more suitable option if you anticipate that the property value could become a contentious topic among beneficiaries.

The executor will also need to ensure that all property insurance is maintained as they are now responsible for the property on behalf of the estate.

Step 5 – determine if a grant is required

Unless all estate assets are held jointly or the estate is very small, and it is unlikely that a claim will be made on the estate, a grant of probate or letters of administration (in the case of an intestate estate) from the Court is generally required.

A grant gives the executor or administrator authority to commence dealing with the assets of the estate.

In Queensland, there is an exception that where a property is the only asset of the estate, the property may be transferred to the executor, in the absence of probate.

Step 6 – lodge a transmission application

Depending on the terms of the Will, the deceased’s property can be transferred directly to the beneficiaries named in the Will or alternatively, to the executor (as personal representative of the estate) who may then sell or otherwise deal with the property.

What if the property is to be sold?

Most commonly, property of a deceased estate will be sold during the administration process.

If the property is to be sold, it must first be transmitted to the name of the executor (as personal representative of the estate) so they may enter a contract of sale on behalf of the estate. This can be done by the executor instructing their solicitor to lodge a transmission application with the Titles Office.

When selling an estate property, it is important that specific clauses are inserted into the contract to protect an executor, if the property is not yet registered in their name as personal representative.

An executor should also enquire whether transfer duty and/or Capital Gains Tax implications apply in the circumstances.

Once registration occurs, the executor or administrator can list the property on the market and enter into a contract for sale on behalf of the estate.

What if there is a mortgage registered on the property?

If the deceased person’s property is mortgaged, the bank or lender will generally expect the balance of the mortgage to be paid.

For this reason, the home will most commonly be sold. The mortgage will then be repaid in full and the remaining proceeds will be distributed in accordance with the terms of the Will.

If the deceased’s mortgage has been paid, but still remains on title, then steps can be immediately taken to have the mortgage discharged from the property. 

When in doubt, seek advice

Executors and administrators have a duty to act with care and diligence and should understand the requirements for accessing and dealing with estate assets, including a deceased’s property.

Although the estate should be administered without delay, the executor must also ensure that all liabilities are met and there are no claims made against the estate before transferring assets.

Failing to do so may result in a claim being made against the estate, to which an executor may be personally liable.

Therefore, before an executor takes a wrong step, it is important for them to ensure they seek appropriate advice.

If you need assistance with the administration of a deceased estate and have questions on how to arrange the sale or transfer of a deceased’s property, please feel free to contact us.