Deceased Estate Sales – All You Need to Know

Dealing with the death of a loved one – whether a grandparent, parent, sibling, child or a relative who is very close to – could be one of the hardest things you’ll ever have to do in your lifetime. It can get even more difficult if you are charged with the task of Estate Administration – meaning you have been named Executor in the deceased person’s Will. In such a case, you will have to apply for a Grant of Probate to start the Estate Administration process, which may involve Deceased Estate sales.

The same can be said if the deceased died Intestate (or without a valid Will) and there’s a consensus you should take charge as the Administrator of the Estate. If so, you will need to apply for Letters of Administration prior to undertaking your role of administering the Deceased Estate.

The Estate Administration process involves many tasks, including making funeral arrangements, locating Beneficiaries, dealing with banks, insurance, bills and so on. One major aspect of administering an Estate involves making an inventory of assets and liabilities. Once this is done, you will be faced with another major task, which is Deceased Estate sales.

In this post, we discuss Deceased Estate sales and all you need to know to handle this step in the Estate Administration process properly and efficiently.

1. What Comprises a Deceased Estate

When someone dies, the collective assets and liabilities they leave behind are referred to as the Estate. Property and belongings that have value, such as cars, shares, real estate and investments, are considered assets. Debts, loans or any monies owed are liabilities.

Most of the time, the deceased person has left instructions on what needs to happen with the Estate in their Will. The people who inherit the deceased person’s Estate are called the Beneficiaries.

Overall, a Deceased Estate consists of all the assets and liabilities of the deceased person that are not jointly owned.

In situations where the Estate is small or with only a few sellable assets, you may not need to go through the formality of applying for a Grant of Probate or Letters of Administration. Conversely, if the Deceased Estate includes the following assets, there is a need to go through either process:

• A land, house or any type of real estate
• Accounts held with any specific bank amounting to approximately $50,000 (this condition may vary from one bank to another)
• Tax credit from the Australian Taxation Office (ATO)
• Substantial shareholdings
• A sizeable superannuation balance is payable to the Deceased Estate
• Rights and licences (e.g., a film script or book they wrote)

Aside from the above, other valuable possessions in an Estate may include artwork, antiques, a classic car collection, jewellery and others.

2. Deceased Estate Sales

When it comes to the distribution of assets, the procedure is usually straightforward, particularly if there are designated Beneficiaries of certain possessions left by the deceased.

For example, it may be stated in the Will that the grand piano should go to the deceased’s musician grandchild, or that an antique Venetian point lace wedding gown should go to the eldest granddaughter. These wishes are usually easy to carry out.

Even in the absence of a Will, the Beneficiaries of the Estate could cooperate to allow each one to take something of value that is also meaningful to them in relation to the deceased in accordance with the relevant State/Territory intestate legislation. Or they can also come up with a consensus about who should get what based on what they know about the relationship of each Beneficiary to the deceased.

However, as mentioned earlier, there are certain assets that may need to be sold, not only to pay off any liabilities of the Estate but also if cash distribution is easier or agreed among Beneficiaries.

This is the point where you may encounter terms like:

• Deceased Estate auction: This refers to the sale process when an estate sale or estate liquidation is decided (or may be instructed in the Will) in order to dispose of certain assets of a Deceased Estate.
• Deceased Estate house sales: These are auctions or sales that involve the disposal of homes owned by deceased persons.
• Deceased Estate furniture sales: These are auctions or sales where furniture of value owned by deceased persons are featured.

Moreover, when the Estate still has debts to settle after the available funds have already been exhausted, a liquidation sale of the assets may be held, even if the Beneficiaries may want to hold on to those assets.

3. Items That May Be Included in a Deceased Estate Sale

As the Executor or Administrator of the Estate, you are tasked with clearing the deceased person’s home or residence and facilitating the sale of assets. To avoid omitting or missing anything inadvertently, you could use a checklist to record the contents of the home and the personal belongings of the deceased.

All this should be done prior to selling a Deceased Estate, including putting up the home for sale (if this is decided upon with the Beneficiaries or mentioned in the Will) or returning it to the landlord if it is a rented residence.

Deceased Estate property for sale may include all assets of the deceased considered to be of value. As mentioned previously, these could include real estate, vehicles, furniture, artwork and other possessions.

4. Complications and Considerations Regarding Beneficiaries

Before selling Deceased Estate property or anything that is of value and sellable, all items specifically mentioned in the Will (gifts and bequests) should be distributed accordingly. Moreover, anything to be included in a Deceased Estate sale should be decided upon in consultation with the Beneficiaries for a number of reasons:

• The Beneficiaries are ultimately the ones who will inherit the Estate in its full value, which sometimes is hard to establish.
• Some Beneficiaries may want to value everything and sell these, and then distribute the cash proceeds of the sale.
• Some items may have sentimental value to someone, and they would like to take the item for themselves.
• Some Beneficiaries may want that an item that wasn’t willed but requested by another Beneficiary to be valued and accounted for (counted towards) as part of that Beneficiary’s inheritance.
• Some Beneficiaries may want to give items away to charities.

In an Estate, there are usually certain goods or items that are unwanted or left over with no one Beneficiary having any interest in these (not even to sell them). If this is the case, as the Executor or Administrator, it may be worthwhile to check if there are any charitable organisations that are willing to collect items they can reuse.

Aside from taking care of reusable items that may be donated to local charities, you could also look into selling or offering free pick-up via social media and e-commerce sites like eBay, Facebook Marketplace and Gumtree.

For the recycling and disposal of certain items, you may coordinate with the local council of the deceased for the next steps. You may also contact establishments like Total Green Recycling for items like laptops, mobile phones and other sensitive e-waste. EcoActiv is another facility focused on specific e-waste like electrical appliances, solar panels, batteries and even mattresses.

5. A Note on Tax-Related Matters

Before distributing and selling a Deceased Estate, find out which specific tax rules may apply. The Australian Taxation Office provides detailed information on Estate Administration-related taxes, and it’s the best place to get answers to your tax-related concerns.

Aside from potential capital gains tax payable, there may be other costs you need to consider before initiating a Deceased Estate sale.

For example, if part of the assets for sale includes real estate such as a house or a farm, check if there are any necessary repairs that need to be done to make the property saleable or reach a higher sale price. Anticipating such expenses will also help you determine whether selling it would be beneficial to the Estate and, ultimately, the Beneficiaries.

6. Process of Selling a Deceased Estate Property

After receiving the Grant of Probate or Letters of Administration, the process of selling a Deceased Estate property usually includes the following steps:

• If there is real estate property, the Executor/Administrator applies to have the title changed from the name(s) of the deceased to their (Executor/Administrator) name.
• Whether there is real estate and other valuables to be sold off, the Executor/Administrator gets several quotes for any expenses that may arise from selling the Deceased Estate. Such expenses may include repair work (as in the case of jewellery or a house), artwork retouching, restoration or fixing, etc., which may be necessary before putting up any assets for sale.
• The Executor/Administrator prepares whichever items are to be sold. This includes getting valuations from different reputable establishments, whether the items to be sold include works of art, antiques, jewellery, vintage cars, etc. If there is real estate to be sold, the Executor/Administrator works with a real estate agent to list the property for sale.
• The Executor/Administrator must maintain transparency throughout the entire Deceased Estate sale process by keeping all the Beneficiaries informed and updated. Sale by auction is usually the preferred mode of sale, as it is a naturally transparent process.

After the items are sold, the Executor distributes the funds to the Beneficiaries in accordance with the instructions in the Will. Without a Will, the Administrator will act under the rules of intestacy in the relevant state.

Specific rules pertaining to selling a Deceased Estate exist in every state. The above is only a general outline of the key processes in Deceased Estate sales.

The best thing to do is to check the laws that apply to your local state or territory authority to ensure your actions are in adherence to prevailing rules. Another great alternative would be to get legal advice so you have someone reliable and well-versed with the law who can answer questions like ‘what is an executor sale?’, ‘what do I do if the Beneficiaries are in disagreement on which assets to sell?’ and so on.

7. Important Considerations When Selling a Deceased Estate

The task of administering an Estate could be a lengthy, stressful and complicated matter. There are specific laws or requirements you need to be aware of to ensure you are able to perform your duty as an Executor or Administrator properly and within the bounds of the law.

Any oversights or errors in Estate Administration, however unintentional, could delay the entire process and result in personal liability. Besides, the process or laws involving Deceased Estate sales vary from state to state. Therefore, it is vital to check the laws in your own state before doing anything. Better yet, speak with a Probate lawyer or solicitor specialising in Wills and inheritance matters.

Get Executor Assistance

If you have concerns about Estate Administration, especially the steps, you can use Australia’s most Comprehensive Executor Guide and Checklists & Tools. You may also use simplyEstate for administration services.