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Mom Passed Away.  How Do We Sell Her House?

Oftentimes, a person’s home is their most valuable asset.  But, in many cases, after they pass away, their heirs would rather sell the house than keep it.  I don’t speak for everyone, but I am pretty sure when that time comes for my family, my sister, brother and I will not want to move back into my mom’s house and be roommates.  I am not exactly tidy, and I play banjo.

If it is in everyone’s best interest to sell the home, and that is something the estate plan permits, there is good news and bad news.  The bad news is that there may be additional hoops to jump through when transferring title to a deceased relative’s home.  The good news is that you may not need to wait until probate is complete to begin the process of selling the home.  But, before moving forward, you should stop and get clear on everyone’s rights and responsibilities.  You don’t want to box up Hummel figurines, clear out 50 years of ugly furniture and pay landscapers to deal with the overgrown yard only to get in a petty argument with your siblings over whether you should have expended that labor or incurred those costs.

If you need help determining your rights and responsibilities, call The Law Office of Keenan Copple PC today. 

The Property Title is the Main Factor.

Like many states, in Colorado, the primary factor for determining the next steps is how the home was titled.  If the home was titled in the decedent’s name only, or as tenants in common with one or more individuals, you will need to look to the decedent’s will or Colorado’s statutes to see who inherits the property.  If the home was titled in the decedent’s name and one or more other individuals “as joint tenants, and not as tenants in common” title will transfer automatically to those other individuals.  If the home was placed in a trust, the trustee will determine what happens next, in accordance with the terms of the trust agreement.  Let’s take a quick look at each of these scenarios.

Determining exactly how real estate is titled can be tricky, if you have questions about how a certain piece of real estate is titled, please contact The Law Office of Keenan Copple today. 

Home Titled in Mom’s Name, Only.

If the home was titled in the decedent’s name alone, you need to determine if the decedent left a Will or not.  If they left a Will, then the Will determines who receives the house.  In a lot of cases, a person’s will simply leaves everything to their spouse, and then to their kids, equally, if their spouse predeceased them.  Similarly, if an unmarried or widowed person dies and had kids, but left no will, all their property goes to their kids or grandkids as set forth in Colorado’s intestacy statutes.

In either case, when a parent dies, you and your siblings may want to sell the home and split the proceeds as opposed to taking title to it together and trying to work cooperatively to own and manage the property.  If getting through Thanksgiving dinner without telling your older sister to stop being such a know-it-all lush is a strain, imagine trying to own and manage a rental property with her.

If title doesn’t transfer automatically (like in some of the scenarios described below), you will need to open probate to appoint a “Person Representative.”  The Personal Representative administers the estate (this is like the “executor” or “administrator”, except in Colorado this role is referred to as the “Personal Representative”).  Once the Personal Representative is appointed, that individual can move forward preparing the home for sale and marketing the property.

You should also note that the Personal Representative makes the decisions about what repairs or updates should be done, what real estate agent to hire, and what offer to accept.  As long as those decisions are reasonable and generally in the best interests of the heirs, the individual heirs should not object and gum up the works.  For example, if your sister is the Personal Representative and she paints the house light yellow after you tell her that you saw an article about how white houses with black doors sell faster, you should just say “thanks for taking care of that” and wait for your money.  But, if she hires her boyfriend who just got his real estate license to list the house and tries to pay him double the normal commission, that is over the line, and you may want to call an attorney.

Once the home is sold, the deed from the estate to the new owners will be signed by the Personal Representative and recorded along with a couple of other documents.  The Personal Representative will then distribute the proceeds in accordance with Colorado’s intestacy statutes or the decedent’s Will, as applicable.  You should be aware, that the Personal Representative will likely need to wait until the probate proceeding has concluded to distribute some or all of the proceeds of sale. 

Home Titled Jointly.

Let’s say you find a copy of the deed and it says the house is owned by mom, you, your brother and your sister “as joint tenants, and not as tenants in common” and you and all your siblings are still alive.  In this case title would transfer automatically to you and your siblings and you would need to record a certified copy of mom’s death certificate along with a “supplemental affidavit” in the Colorado county where the home is located.  The supplemental affidavit is a document where a disinterested person (i.e. not you or your siblings in this example) swears to the fact that the person referenced in the death certificate is the same person referenced on the title to the home.

The catch is that you now own a house 33/33/33 with your brother and sister.  So, if you want to sell it, you will need to work together and agree on what repairs need to be done, who will pay for them and what offer to accept.  You will also both need to complete any paperwork associated with the sale and sign the deed to the new owners together.  Then you will split the proceeds of the sale evenly.

In the event there is a recorded “Beneficiary Deed” from the parent in favor of the children, the process is similar. If you are unsure of what to record with the county clerk and recorder, call the Law Office of Keenan Copple PC. 

Also, note that if the house is titled jointly, the joint tenant gets the house regardless of what the decedent’s will says.  For example, if your mom owns a house as joint tenants with your step-dad, he will get the house when your mother passes away regardless of what her will says.  Her will can say you inherit EVERYTHING, and if that house is titled jointly, your step-dad gets it and can turn your old bedroom into a craft room for the new girlfriend he met at senior water aerobics—gross, don’t think about your step-dad in a swimsuit!!

Home Owned by a Trust.

In the event your parent transferred ownership of their home to a trust during their lifetime, the trust agreement will dictate what happens to the home.  You will know the home has been transferred to a trust is if a deed has been recorded where mom or mom and dad transferred the house to someone “as Trustee of the Mom and Dad Revocable Living Trust,” or similar language.  If this is the case, the house will be outside of the decedent’s probate estate and the trust document will dictate who will inherit the house, if it should be sold on death, or may even provide that the home will continue to be owned and managed by the trust.

Trust agreements can in all different shapes, sizes and flavors.  So, if the home is owned by a trust, it really is the trust agreement that determines what happens next.  If you need help interpreting a trust agreement, contact The Law Office of Keenan Copple PC today.    

Bottom Line:

When a loved one passes away owning a home, there are a variety of factors that dictates what happens next.  You may want to consider seeking the advice of legal counsel to clarify your rights and responsibilities in the process.