Change of Property Ownership & Payment to Beneficiaries

jonnyni

Hello,

My unmarried Aunt (with no children) passed away a few weeks ago. I am her sole executor. I have applied for probate.

In her will she left her house (in her name) approx valued at £120k to her brother (my father)  who died a few years ago. Her will states that, if he dies before her, my sister and I are to receive the house in equal parts.  

In my Aunt's will, she also left savings (approx £40k) to be split between her surviving two sisters. 

Two questions ...

1. My sister and I will sell the house as soon as probate is completed. We are unsure whether we should transfer the house into our names before selling it or just sell it under my Aunts name. What are the advantages or disadvantages in transferring ownership, before selling it?

2. When does her two sisters receive their inheritance? Is it when the house is sold, or it is  anytime after probate has been awarded?

Thanks,

Jonny

Keep_pedalling

No need to transfer it into your names the transfer go from your aunt to the new owners.

You may have unexpected expenses to deal with until the house is sold, so I would certainly not distribute in full until you got everything sorted, but you could always do an interim payment to save you sitting on so much cash.

How did you value the house? If you have undervalued it the estate could face a capital gains liability when it sells for more.

Flugelhorn

there may be some slight problems, maybe it is the way the OP has written it but it sounds like OP and sister get the house and her sisters get the savings.
Where would  debts / expenses be paid from - is there any other estate? 

jonnyni

Keep_pedalling said:

No need to transfer it into your names the transfer go from your aunt to the new owners.

You may have unexpected expenses to deal with until the house is sold, so I would certainly not distribute in full until you got everything sorted, but you could always do an interim payment to save you sitting on so much cash.

How did you value the house? If you have undervalued it the estate could face a capital gains liability when it sells for more.

Thanks for your reply.

Good suggest re distribution of funds - hadn't thought of that.

>How did you value the house?

I was formerly valued by a local estate agent. I assume we will have CGT at whatever it is sold for, as it was bought in 1995 for around £60K (TBC) ?

jonnyni

Flugelhorn said:

there may be some slight problems, maybe it is the way the OP has written it but it sounds like OP and sister get the house and her sisters get the savings.
Where would  debts / expenses be paid from - is there any other estate? 

That's correct - My sister and I get the house and her sisters get the savings.

Where would  debts / expenses be paid from - is there any other estate? 

No other estate.

RAS

jonnyni 

Thanks for your reply.

Good suggest re distribution of funds - hadn't thought of that.

>How did you value the house?

I was formerly valued by a local estate agent. I assume we will have CGT at whatever it is sold for, as it was bought in 1995 for around £60K (TBC) ?

You can't use the savings to fund interim costs, those are your aunts' inheritance. In practice, you could use a small amount to cover essential costs like insurance. Assume you have told the insurers, Council and utilities?  Both the latter will waited for payment until probate us granted.

Is there no residual Estate, as in a normal bank account?

CGT is not paid on inheritances. Hopefully your estate agents suggested a reasonably high price for the valuation? Because there could be a CGT liability if the sale price exceeds that valuation.

You'll need to pay the sale costs from the sale itself. Do not transfer into your names, as that complicates matters. Not least as some mortgage companies don't like sales that take place within 6 months of transfer. And although the Land Registry will expedite sales, they take up to 18 months to register at present.

Is the property registered? If not, start getting together all the documentation.

jonnyni

RAS said:

jonnyni 

Thanks for your reply.

Good suggest re distribution of funds - hadn't thought of that.

>How did you value the house?

I was formerly valued by a local estate agent. I assume we will have CGT at whatever it is sold for, as it was bought in 1995 for around £60K (TBC) ?

You can't use the savings to fund interim costs, those are your aunts' inheritance. In practice, you could use a small amount to cover essential costs like insurance. Assume you have told the insurers, Council and utilities?  Both the latter will waited for payment until probate us granted.

>In practice, you could use a small amount to cover essential costs like insurance. Assume you have told the insurers, Council and utilities? 

Yes. All paid up to date. I paid some of them from my own funds and plan to claim back these from estate at end of probate.

>Is there no residual Estate, as in a normal bank account?

I included normal bank account money in what I called "savings" above ... sorry, just my terminology.

>CGT is not paid on inheritances. Hopefully your estate agents suggested a reasonably high price for the valuation? Because there could be a CGT liability if the sale price exceeds that valuation.

I understand. Yes, he valued it at upper end, but even if it end up selling for more, any reasonable increase will be within our CGT allowances anyway.

>You'll need to pay the sale costs from the sale itself. Do not transfer into your names, as that complicates matters. 

Good advice, we won't transfer into our names.

Q .. I assume we can still tidy up house and do some redecoration before the sale, and we will pay for this ourselves (as we will be gaining in improved property value)? It's a old-person's house.

>Is the property registered?

Yes.

Thanks again.

J.

Savvy_Sue

jonnyni said:

Q .. I assume we can still tidy up house and do some redecoration before the sale, and we will pay for this ourselves (as we will be gaining in improved property value)? It's a old-person's house.

You can, but it's often reckoned that it's not worth the effort, ie the property value won't increase THAT much. Clean is more important than newly decorated, IMO. But take your estate agent's advice: I guess if there's a glut of the same kind of property, something that's newly re-decorated in a neutral fashion MAY get the edge. 

I'd say it was worth keeping the garden tidy: lawn mowed, if nothing else. If the house looks 'empty', it may be attractive to the wrong kind of person. 

jonnyni

Savvy_Sue said:

jonnyni said:

Q .. I assume we can still tidy up house and do some redecoration before the sale, and we will pay for this ourselves (as we will be gaining in improved property value)? It's a old-person's house.

You can, but it's often reckoned that it's not worth the effort, ie the property value won't increase THAT much. Clean is more important than newly decorated, IMO. But take your estate agent's advice: I guess if there's a glut of the same kind of property, something that's newly re-decorated in a neutral fashion MAY get the edge. 

I'd say it was worth keeping the garden tidy: lawn mowed, if nothing else. If the house looks 'empty', it may be attractive to the wrong kind of person. 

Thanks, Sue, sound advice.

thegreenone

I would reiterate all of the above and to add to Sue's post, can you set up some lamps on timers.  My late Mum's flat was broken into when I was clearing it.  Although, I strongly suspect the man who bought one of the bed's, but no proof.  Nothing was taken as there was next to nothing left.  £400 to fix the garden door.