Can I sell my inherited house before probate is completed in NC?
Updated: May 5
Can I sell my inherited house before probate is completed in NC?
If the home you inherited has been included in probate, I'm sure the question "Can I sell my inherited house before probate is completed?" has come to mind.
It is possible to sell an inherited house before probate is completed; however, there are some important legal implications to consider. You should be aware that this can be a complex and risky process, with different laws and regulations in each state. In North Carolina, there are specific guidelines that must be followed to ensure the validity of the sale.
This article will provide a comprehensive overview of selling an inherited house in North Carolina before probate is complete. We will discuss the legal implications and steps to take, as well as potential benefits or risks associated with this action. Additionally, we will advise executors on how best to proceed.
So if you're looking to sell an inherited house before probate is complete in North Carolina, let's dive in!
[Need help with probate? We offer helpful probate services and will work with you to find the plan that meets your needs. Learn more.]
Legal implications of selling an inherited house in NC
When considering selling an inherited house before probate is completed in NC, it's essential to understand the state’s laws and regulations.
Before an inherited property can be sold, ownership must officially transfer through probate. Nevertheless, the house should still receive proper care during this period; for instance, utility bills and real estate taxes need to remain current.
However, according to North Carolina law, heirs of an estate can sell a property without going through probate if all the heirs agree and sign off on the sale. This process should be done with the assistance of a real estate attorney to ensure that all legal requirements are met.
In certain cases, if the house has been included in probate, it is also possible to sell it before the probate process has been finalized. This tends to happen when somebody dies without creating a Will or if there are insufficient funds within the Estate to cover any unpaid debts.
The important thing to remember is that even if the house is included in a will, the will itself must still go through probate.
Many people tend to think that because property or assets were left to them in a will that it immediately becomes their after the death of their loved one. But this is not always true.
If the decedent had debt that needs to be paid and their are no funds to pay the decedent's creditors, the courts may demand that the property and all assets be sold in order to pay off the creditors.
If there are any funds remaining after the creditors has been paid, those funds will pass to the beneficiaries and heirs.
What Types of Property Can Be Inherited?
From cars to clothes, anything can be inherited - and it's all legally classified as property.
Estate Plans help determine how personal belongings, assets, or any other type of possession will be divided up when the time comes.
People usually think of real estate when it comes to selling inherited property. But inherited property can be more than just real estate. Other forms of inheritance property include:
• Bank Accounts: Any accounts held solely under the deceased's name can be inherited. This includes retirement plans, and bank accounts.
• Investments: Anything from stocks and bonds to mutual funds, annuities, and other insurance policies are classified as investments.
• Personal Belongings: Commonly referred to as personal property, these items include furniture, jewelry, artwork, collectibles, etc.
Are Siblings Legally Allowed to Force the Sale of Inherited Property?
If all siblings agree to do so, or if estate costs need to be covered, an inherited property can be sold through a probate action. Therefore, siblings can use their legal rights and join forces to force the sale of the shared house.
If multiple people own a piece of real estate, the first step is to decide whether they should buy each other out or sell the property. If they cannot agree, they will need to get legal help and file a petition in court that forces the sale of the property. This way, all beneficiaries can get what they are entitled to.
If the court rules to sell the house, it will be put on the market and sold for its appraised value. Subsequently, any money earned from this sale will be distributed amongst all beneficiaries - even if one heir is opposed it. However, if creditors or taxes need to be paid, monies will first be distributed to them and then to the heirs.
Do I Have to Pay Tax If I Sell My Inherited Property?
If you sell an inherited property and make money from the sale, you will have to pay taxes. This is called a capital gains tax. The tax you will have to pay depends on how much money you make from the sale and your income bracket.
This property has likely gone up in value since it was first bought by the decedent. This means that the original purchase price is very important. As a beneficiary of this asset, you will not have to pay taxes on the total amount the home is now worth. The IRS will do a "stepped-up" basis calculation to determine how much capital gains tax must be paid.
If you sell an inherited property within one year of inheriting it, you will be taxed at the short-term rate, which ranges from 10% to 37%. If you own the property for more than one year before selling it, your profits will be taxed at the lower long-term capital gains rate, which ranges from 0% to 20%.
Are There Ways to Prevent Paying Capital Gains Tax When Selling an Inherited Property?
If you are selling a property that you inherited, and you do not want to pay capital gains tax, you can avoid it by making it your primary residence. This means living in the home for two years. After two years, you will not have to pay capital gains tax on the sale of the property.
Contact North Carolina Probate Solutions Today!
If you are looking to sell an inherited property before probate is completed, it can take a lot of work. It's essential to seek the help of a qualified real estate expert and lawyer to navigate the legal implications and regulations of North Carolina state law.
At North Carolina Probate Solutions, we have years of experience helping families through this process. We understand how difficult it can be emotionally and legally, which is why we strive to provide personalized service that puts your needs first.
Contact me today for more information on how I can help you sell an inherited property in North Carolina.
I am here to make sure everything goes smoothly, so you don't have anything to worry about!
Certified Probate Real Estate Specialist Licensed Realtor
* NOTE: North Carolina Probate Solutions and the author of this article is not a licensed attorney or CPA. This post should not be considered legal or tax advice. Always consult an estate attorney or tax professional when needing legal answers and legal advice.
To learn more about the probate process
How to Avoid Probate in North Carolina
In NC why do you have to go through probate if there is a will?