What To Do When A Loved One passes Away
A Loved One Has Passed Away. What Do We Do With the House and Everything Else?
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When someone you love passes away, the last thing you want to think about is paperwork.
Yet suddenly there are questions everywhere.
Where is the will? Is there a trust? Who is allowed to make decisions? What happens to the house? Do we keep making the mortgage payment? Can we sell it? What about the car, bank accounts, insurance and taxes?
If you are the person trying to handle all of this, it can feel overwhelming very quickly.
You don't have to figure everything out in one day.
The first goal is to gather information, protect the property and determine who has the legal authority to act. From there, the right professionals can help you work through the rest.
DOWNLOAD A FREE WHERE TO START PDF CHECKLIST
First, Gather the Important Documents
Before making major decisions, start looking for the documents that will help determine what happens next.
Certified copies of the death certificate
Original will and any amendments
Trust documents and amendments
Deed or other ownership documents for the home
Most recent mortgage statement
Homeowners insurance policy
Property tax information
Bank and investment account statements
Retirement account information
Life insurance policies
Vehicle titles
Recent income tax returns
Credit card and loan statements
Utility bills and recurring expenses
Business ownership documents, if applicable
Safe-deposit box information
Contact information for the person's attorney, accountant, financial adviser and insurance agent
You may not find everything immediately. That's okay. Start a folder, physical or digital, and add documents as you find them.
Find the Will and Trust
These are two of the most important documents to locate, but they do different things.
A will generally states how someone wants certain property distributed after death and usually names the person they want to handle the estate.
A trust may hold ownership of assets and name a successor trustee who can step in after the person dies.
But finding a trust document isn't enough. You also need to determine which assets were actually placed into the trust.
For example, if there is a trust but the home was never properly transferred into it, additional legal steps may be necessary.
This is one of the reasons I recommend speaking with an estate or probate attorney before making decisions about the property.
Determine Who Has Authority to Act
This is an important step that families sometimes overlook.
Being someone's child does not automatically give you the legal authority to sell their home, close their accounts or distribute their property.
Depending on the situation, the person with authority may be:
A surviving joint owner
The successor trustee of a trust
A personal representative named in a will and appointed by the court
A personal representative appointed by the court when there is no will
If probate is required, the court may issue documents establishing the personal representative's authority to act for the estate.
Until you know who has authority, be cautious about selling, giving away or disposing of property.
What Happens to the House?
For many families, the home is the largest asset in the estate, and it can also be the most emotional.
Before deciding whether to sell it, keep it or transfer it to an heir, find out:
Whose name is on the deed?
Is the property owned by a trust?
Is there a surviving co-owner?
Is there a mortgage or home equity loan?
Are property taxes current?
Is the homeowners insurance still active?
Are there HOA dues?
Are utilities being maintained?
Is someone currently living in the property?
Who has legal authority to make decisions about it?
Don't automatically stop paying the mortgage, insurance, utilities or HOA expenses while the estate is being sorted out. Talk with the appropriate attorney, lender and other professionals about what should continue to be paid and from what funds.
If the home is vacant, make sure it is secure. Collect the mail, maintain the yard, check the property regularly and contact the insurance company. A vacant property may have different insurance requirements.
Don't Start Emptying the House Too Quickly
This can be difficult because family members understandably want to begin sorting belongings.
But before furniture, jewelry, artwork, tools, collections or other possessions are given away or sold, determine who has authority over the estate and whether those items need to be inventoried or appraised.
Important documents can also be hiding in desks, filing cabinets, safes and boxes.
Slow down before the dumpster arrives.
Make a List of Assets and Debts
Create a basic inventory of what the person owned and what they owed.
Assets may include:
Home and other real estate
Bank accounts
Investments
Retirement accounts
Vehicles
Life insurance
Business interests
Valuable personal property
Money owed to the deceased
Debts and obligations may include:
Mortgage
Home equity loans
Credit cards
Auto loans
Medical bills
Personal loans
Taxes
HOA obligations
Other outstanding bills
Don't assume that family members personally owe all of these debts. The estate attorney can help determine which obligations belong to the estate and how they should be handled.
Contact the Right Professionals
Most families do not need to navigate an estate alone.
Depending on the circumstances, your team may include:
Estate or probate attorney
To review the will, trust, ownership of assets, probate requirements and determine who has authority to act.
CPA or tax professional
To help with the deceased person's final income tax return and determine whether the estate or trust has additional tax filing requirements.
Financial adviser
To help identify and properly handle investment and retirement accounts.
Insurance professional
To review homeowners, auto, life and other insurance policies.
Real estate professional
If real estate is involved, an experienced agent can help determine the property's current market value, identify repairs or maintenance that may or may not make financial sense, coordinate vendors and eventually market the property if the authorized person decides to sell.
Appraiser or personal-property specialist
Some estates may require professional valuations of real estate, jewelry, collectibles, antiques or other valuable assets.
What About Taxes?
There may be more than one tax issue after someone dies.
The deceased person's final individual income tax return may need to be filed. Depending on the circumstances, an estate or trust may also have its own tax filing requirements.
This is an area where I would bring in a qualified CPA or estate tax professional rather than trying to figure it out yourself.
Also, before selling inherited real estate, ask a tax professional about the property's tax basis and potential tax consequences. The tax treatment of inherited property can be very different from the tax treatment of property you purchased yourself.
Does the Estate Have to Go Through Probate?
Not necessarily.
Some assets can transfer outside probate depending on how they are owned and whether beneficiaries were properly designated.
Examples may include property held in a trust, certain jointly owned property, accounts with designated beneficiaries and other assets with transfer-on-death provisions.
Arizona also has procedures that may allow qualifying smaller estates to transfer certain property without a traditional probate proceeding.
This is exactly why I wouldn't assume that "there's a will, so we're fine" or "there's a trust, so we don't need an attorney."
Let the documents and an experienced professional tell you what process applies.
A Simple First-Week Checklist
When everything feels overwhelming, start here:
Order certified death certificates
Locate the original will and trust documents
Identify the person who may have authority to act
Secure the home and other property
Make sure important insurance coverage remains in place
Collect and safeguard mail
Locate mortgage, banking, investment and insurance information
Make a preliminary list of assets and debts
Contact an estate or probate attorney
Contact the CPA or tax professional
Avoid distributing or selling property until authority is established
If a home is involved, begin gathering the deed, mortgage, insurance, tax, and HOA information
You do not need to decide immediately whether to sell the home.
First, determine what you have, who has authority, what obligations need attention, and what options are available.
One Final Thought
Losing someone you love is difficult enough. Having to learn about trusts, probate, mortgages, taxes and property at the same time can make an already emotional situation feel impossible.
Take it one step at a time.
Gather the documents. Protect the property. Find out who has legal authority. Surround yourself with professionals who understand their part of the process.
And ask questions.
You shouldn't be expected to know how to settle an estate simply because someone you love passed away.
Important: This information is intended as a general starting point and is not legal, tax or financial advice. Estate and probate laws vary by state and individual circumstances. Consult qualified legal and tax professionals regarding your specific situation.
FAQs: What to Do When a Loved One Passes Away
What should I do first when a parent dies and owns a home?
Start by locating the will, trust, and property documents, ordering certified copies of the death certificate, securing the home, and determining who has legal authority to act on behalf of the estate. Avoid selling, giving away, or disposing of property until that authority has been established.
Does having a will mean the estate won't go through probate?
No. A will provides instructions for how certain assets should be handled and generally names the person the deceased wanted to manage the estate, but it does not automatically avoid probate. Whether probate is necessary depends on factors including how assets are owned and whether beneficiary or transfer-on-death designations exist.
If my Parent had a trust, does the house automatically avoid probate?
Not necessarily. The important question is whether the home was actually transferred into the trust. Finding a trust document does not guarantee that every asset was properly titled in the trust. An estate or probate attorney can review the deed and trust documents and determine what applies.
Can I sell my Parent's house after they die?
Possibly, but first you need to determine who has legal authority to sell the property. Depending on the circumstances, that might be a surviving owner, successor trustee or court-appointed personal representative. Don't sign a listing agreement or sales contract until that authority has been established.
Should we continue paying the mortgage after the homeowner dies?
Don't simply stop making payments. Gather the mortgage information and speak with the appropriate estate attorney, loan servicer, and other professionals about how the mortgage should be handled while the estate is being settled.
Should I notify the homeowners insurance company?
Yes. This can be particularly important if the home becomes vacant. Insurance requirements and coverage can change when a property is unoccupied, so the appropriate insurance professional should be contacted promptly.
Should we clean out the house right away?
Usually, there is no reason to rush. Important paperwork and valuable property may be inside the home, and estate property may need to be inventoried before it is sold, donated or distributed. First determine who has authority over the estate and ask the estate attorney what should be preserved.
What professionals might I need after a loved one dies?
Every situation is different, but the professional team may include an estate or probate attorney, CPA or tax professional, financial adviser, insurance professional, real estate professional and, when appropriate, an appraiser or personal-property specialist.
Do inherited homes have different tax rules?
They can. Inherited property may receive different tax treatment than property you purchased yourself, including special rules involving the property's tax basis. Before selling inherited real estate, speak with a qualified tax professional about your individual circumstances.
Do all estates have to go through probate?
No. Certain assets may transfer outside probate depending on how they are owned, whether they are held in a trust, and whether beneficiary or transfer-on-death provisions apply. Some smaller estates may also qualify for simplified procedures. An estate attorney can determine which rules apply to your particular situation.
How soon do we need to decide whether to sell the house?
Unless circumstances require an immediate decision, you don't have to decide everything at once. First, secure the property, determine legal authority, understand the estate's financial obligations, and gather professional advice. Once you understand the situation, you can make a more informed decision about whether keeping, transferring, or selling the home makes the most sense.
CONTACT:
DEBBIE ATWOOD- REALTOR / REALTY ONE GROUP
📞 425-750-4970
🌐 www.atwoodgrouprealestate.com
