Don’t over think this. Real estate brokers sell houses via Will or Trust every day. Escrow officers/closing attorneys can handle easily. An extra owner or two just means extra signatures. When I sold my folks house in CA, nearly everything was signed electronically via Docusign.
Whoever is named as Personal Representative (Will) or Executor (Trust) has legal authority to enter the house. And also has legal authority to allow anyone else in, or give keys to all the other sibs and contractors to get work done.
Bank will not seize any property, unless there is a court filing to do so. Bank will ask for an original certified death cert and a copy of the Will/Trust to see who is in charge. With that, Bank will offer to open a new account under the ‘Estate of’ or Trust name so bills can be paid. Normal course of doing business. (I used my local credit union since they were close by.)
If mortgage (or property taxes) is due tomorrow, the Personal Representative can pay it directly (out of personal funds) and then get reimbursed by the Estate. That too, is common.
Someone who does not want funeral / burial / cremation expenses to be a burden on others may want to look into donating their dead body for research or medical instruction.
US military veterans may have additional funeral / burial options.
I think usually a Will defines an executor and an alternate (who assumes duty if primary is deceased…and maybe also if primary declines?)
I think the complication in the sister’s situation could happen if any of her sibs predecease her. It might not be clear if/how next generation would inheirit.
I’m not sure how that works for TOD either. But for beneficiaries of her IRA, she gave the first child of each sibling the money. I know it’s not fair but it’s her money.
This link says you can name alternate beneficiary in TOD, so that’s what I do.
She has requested for me to print out Medicare directive for her doctor, and TOD forms for her real estate properies. I have to think about the Will later.
This is worth discussing with an estate attorney. Part of the estate planning should be to have enough cash or other assets to pay the estate’s debts if most of the assets automatically transfer upon death. For example, income tax returns need to be filed for the deceased for the year they passed away. If the house automatically transfers upon death then it isn’t in the estate and wouldn’t be available to sell for funds to pay other estate costs. The contents of the house may not belong to the RE owner however. So the estate may need to pay to clear it out? Cash or other assets owned by the deceased can be used. Alternatively, the executor may need to ask the beneficiaries to release some of their money to the estate to pay costs if the estate doesn’t have enough funds.
As an aside I’m surprised people use TODD for real estate because you lose the step up in basis.
I don’t believe that is correct. (You only lose step-up basis when you add the name of a heir as a current owner, essentially gifting them half of the asset while the gifter is still alive.)
But the rest of your post is spot-on. If the home has a ToD, then the heirs are automatically the new owners; the estate cannot sell the house as the estate no longer ‘owns’ it.
And yes, if everything is PoD/ToD, and there is not enough $$ to pay final expenses, then the heirs will need to cough up some cash to help pay them.
Thank You @vpa2019 and @bluebayou, I will bring those points up when I see my sister. But she’s the type that doesn’t want to do much, only the minimum, so I try to help as much as possible.
But I think if I break even in dealing with her estate I’m happy. She took care of my mom and dad’s finance when they were older. I didn’t have to do anything. I’m thankful I had the time to focus on my family then. Now I’m retired so I can help out.
But she’s a hoarder and that’s also a problem.
Here is a list of states that allow TOD for real estate
In other states where none allowed, like NY, I assume you could name a Trust on the deed (?)
We have not looked into doing it in CO. Husband and I are both on the deed. The house is one of the few things that would go through the will if both of us died. Other assets have TOD/POD/beneficiary designations.
One of the big things you can do to help your sister is to ensure there is a good list of assets (and beneficiaries where designated). You probably already have this, but I’m posting the advice for others reading along.
I did try to help her buy her house so I have roughly an idea but I’m not sure I know 100% if she doesn’t volunteer. I mean I don’t want to sound nosy about her money either.
Yea, it can be awkward. But if she wants you (or somebody else) to be executor, it would be good for them to have a list. Or she could make the list and tell somebody where it is.