This comprehensive guide equips you with essential insights into selling a jointly owned property after the co-owner dies.
We cover key questions and scenarios, as well as the sales process during probate and after its completion.
Whether you inherited a house recently or are planning for the future, read on for information to help you determine the path that best suits your situation.
Can You Sell a House You Co-Own with the Deceased?
Yes, you can sell a house you co-owned with a deceased person. However, various factors impact the sale’s timing and how straightforward the process may be.
The type of ownership arrangement is a primary consideration.
If the property title provides for the decedent’s share to transfer to you, giving you full ownership, you can proceed with the sale at your discretion.
However, if you don’t have survivor’s rights, the house is part of the estate and subject to the will or state inheritance laws. That usually requires court oversight, extending the sales process.
If you inherited a house through a will, your rights to sell depend on the wishes of the deceased, which may impact whether you can sell outright or if other heirs are involved.
With multiple beneficiaries, things get more complex, as typically all must agree to sell. Disputes can complicate or even prevent the sale.
Additionally, the house may need to go through estate settlement, possibly requiring court approval or waiting until the settlement is concluded.
Selling a Jointly Owned House Without Probate
Probate involves court supervision to administer a deceased individual’s estate properly and is an essential legal process in many cases.
It includes validating a will, if that person created one, settling debts, and distributing remaining assets to beneficiaries.
Since the process can be costly and time-consuming, many people look for ways to sell their property before probate or to avoid it when selling a house after a co-owner’s death.
As you plan, keep in mind that there are instances where you can sell a house without probate, even when it was jointly owned.
To illustrate, here are situations where a co-owner wife can sell her deceased husband’s property outside of the estate settlement.
All but the last scenario can also apply to other co-owners, regardless of their relationship.
A Deed Transfers Title
A key provision of a transfer-on-death (TOD) deed is the specification of one or more beneficiaries to inherit the property upon the co-owner’s death.
You automatically receive ownership as a beneficiary, bypassing the probate process entirely.
You Were Joint Tenants
Joint tenancy is an ownership arrangement where the share of the deceased does not go through probate but directly passes to the surviving joint tenant(s).
This provision is known as the right of survivorship.
Property Is Held in a Living Trust
The trust, not the individual, owns the house. So, the asset can transfer seamlessly without the need for probate.
Instead, the successor trustee (often the surviving co-owner) can sell the property according to the trust’s terms.
Small Estate Rules Apply
In jurisdictions that offer this exemption from probate requirements, the estate’s value must be less than the legally established asset threshold to quailfy.
An affidavit and a certified death certificate are often sufficient to claim this exception.
It’s Community Property
Some states consider assets acquired during a marriage as jointly owned by both spouses.
With rights of survivorship, each spouse’s interest passes straight to the survivor upon death.
Selling a Jointly Owned House During Probate
If the circumstances with your property don’t permit you to skip the estate settlement process, selling a house through probate is often an option.
That process involves a series of specific steps that differ from state to state. The general process, however, shares similar elements.
So, what happens when you sell a house you inherited under probate rules? Here’s a breakdown of what that entails and the typical steps involved.
- At the onset, the court appoints someone to manage the estate, which can be you if you’re named executor in the will or petition to be administrator if there’s no will.
- Your first step after appointment is establishing the property’s true market value. For this purpose, you will need an appraisal for inherited property to assess its worth and ensure it sells for a reasonable price.
- Even though the administrator or the executor can sell a house that is in probate, you usually have to get the court’s permission, which may involve a hearing.
- You can prepare the house for sale while awaiting approval. If you inherited a house that needs work, you can use this time to make repairs and improvements you choose.
- Once the court authorizes the sale, you can market the house independently or engage a real estate professional.
- You generally must present the sales agreement you want to accept to the court for approval, often requiring another hearing.
- Following the court’s final assent, you can close the sale, transferring ownership.
Selling a Jointly Owned House After Probate
After probate proceedings, you gain full control over the property if you become the sole owner. Then inherited property can be sold.
So, you are not subject to any probate-related restrictions on when and how to sell an inherited property. Those decisions are yours to make.
That allows for a simpler selling experience, eliminating the need to consult other beneficiaries or follow additional court-required steps.
As for timing, keep in mind that it can affect your financial outcome. In particular, it can lead to a higher tax liability if you realize capital gains on an inherited house.
The tax basis of inherited property is typically adjusted to the market value at the time of inheriting it, applying either to the entire property or just the decedent’s share, depending on the co-ownership structure.
Regardless, the tax amount is based on the difference between the sale price and the house’s stepped-up value.
So, property appreciation with the passing of time could result in a gain and more taxes owed.
You can better strategize how to avoid capital gains tax on inheritance and increase your proceedings from the sale by understanding the factors involved.
Additionally, here’s how to report the sale of inherited property on a tax return.
What’s the Quickest Way to Sell an Inherited House?
Working with professional buyers who purchase inherited properties can be your most practical and efficient option.
These investors can buy your probate house without an agent for cash, offering a hassle-free sale.
They also purchase houses in any condition. So, this approach can yield the most positive outcome if you’ve inherited a hoarder house and lack the time or money for cleanouts or repairs.
In addition, when selling to inherited property purchasers, you can:
- Wrap up the transaction on a fast track, often within days.
- Get immediate access to funds with a cash deal.
- Avoid financing hiccups that can delay or prevent the sale.
- Save money — no realtor commissions, and the buyer pays closing costs.
- Benefit from a simplified process with less paperwork.
- Receive an offer with few or no contingencies, reducing hurdles.
- Get expert assistance with the probate process and its complexities.
Curious how this option may work for you? Whether you are selling an inherited house as is or after renovations or repairs, get a cash offer today and discover how easy the process can be.
