E342 Thank You to Our Listeners!
Anthony S. Park
Based on feedback from you, the audience, we're pausing these episodes and will focus on writing instead: Our blog: Our books on Reviews always appreciated! Thank you for sharing all your amazing questions and stories, and thank you for listening!
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E341 How Long to Transfer Real Estate After Death
Anthony S. Park
There is no legal time limit to transfer real estate after death. It could happen quickly, or it could take years. We’ve seen cases where the real estate doesn’t get transferred until generations later. A fast sale is ideal, because problems can emerge in the meantime. There is a lag between the date of death and when the executor gets legal authority to handle the property. So, even “fast” isn’t very fast. How long does it take to get preliminary letters? The executor does not have full authority over the estate until he gets letters testamentary (or letters of administration) from...
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E340 Reasons Not to Make a Loved One the Executor
Anthony S. Park
We’ve talked before about not making a loved one your executor. I recently read an article titled, “.” Here, we’ll add our own perspective for why it’s not a great idea. Being executor can be emotionally difficult It is a duty that begins almost immediately after the death of your loved one. You are grieving the loss while facing a list of daunting tasks. Even normal probate is a lot of work and can be tough while grieving. In a somewhat difficult probate, you . If you are also family and friends with these people, it can be awkward. They will continually ask you when they will...
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E339 Why Sharing Your Seed Phrase is a Bad Bitcoin Inheritance Plan
Anthony S. Park
In this episode, we will talk about self-custodied bitcoiners (not those who have their coin on an exchange or with a third party). Some bitcoiners share their seed phrase with their spouse or adult children. Or perhaps they share their cloned wallet with those trusted individuals. It’s temptingly easy, essentially . But, as we’ll discuss, it can be insecure for reasons you may not think of. Sharing your seed phrase can be dangerously . Relationships change One reason that this plan is not flexible is because relationships change. Married couples can become divorced or...
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E338 Should I Sell My Home Before I Die?
Anthony S. Park
This is a very common question that we get from Solo Agers. We’ll review the pros and cons of making that decision. Reasons to sell your home before you die The biggest reason Solo Agers want to sell their home before they die is because they don’t want to leave a mess for their loved ones. Otherwise, there may be a lot of cleaning, maintenance, and packing for the heirs to do. Additionally, the before it is in sellable condition. Another reason is that Solo Agers may want to downsize anyway. Downsizing is a different topic, so we won’t focus on that here. Reasons to...
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E337 Who Owns a House During Probate?
Anthony S. Park
When someone dies, many folks are confused about who owns the house during probate, right after the death. Technically, the heirs own it immediately upon death, subject to debts and taxes of the estate. But, sometimes is not clear who the heirs are. The probate process decides who exactly are the heirs and places an executor in charge to sort out all those debts and taxes. So, the heirs own the house, but if it is not clear who the heirs are, then you kind of need to wait to see who really owns it. Understandably, this is a bit confusing. We’ll cover common questions on who owns the property...
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E336 Risks of Being an Executor
Anthony S. Park
What are the risks of being an executor? An executor has a lot of power and responsibility during probate, but is correspondingly accountable for everything that happens within the estate. We’ll cover how an executor has risk of even personal liability, how long that risk lasts, and how an executor can protect himself from these risks. Executor personally liable for debts and taxes The executor has personal liability for debts, taxes, and anything wrong with the estate. If an executor makes an error, the court’s first reaction is to deny payment of the executor's commission. If the...
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E335 Why a Letter of Instruction for Bitcoin Inheritance Will Fail
Anthony S. Park
A letter of instruction will likely fail for your bitcoin inheritance plan and should have only a marginal role in your plan, if any. Search for “bitcoin inheritance” and you will probably find lots of people advising you to write a letter of instruction for your heirs. We talked about this and even provided a . Now, having spent a bit more time delving into different approaches to bitcoin inheritance, we’re de-emphasizing a letter of instruction. Note: this applies to self-custodied bitcoin, not held through a third-party. Educate your heirs A letter of instruction is a subcategory the...
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E334 Why Hire a Professional Trustee?
Anthony S. Park
I do serve as a professional trustee, not just executor, or our Solo Ager clients. We’ll cover why our Solo Ager clients are looking for a professional trustee, why they don’t use banks, and how much it costs to hire a professional trustee. Disputes between trustee and beneficiary Why are our Solo Ager clients looking for a professional trustee? The main reason is because of potential disputes between the trustee and the beneficiaries. Unfortunately, this kind of conflict is very common, even more so than between heirs and executors. A trust creates a much longer relationship: an estate...
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E333 Seller Credit When Selling Probate Real Estate
Anthony S. Park
This happens when the buyer agrees to a higher contract price, but the seller also agrees to credit back a set amount to the buyer, so the net purchase price is lower. For example, if the buyer wants the house for $250,000, they would set the contract price at $300,000 with a side agreement that the seller would credit $50,000 on the closing statement, effectively making the price $250,000. Why not just a price reduction? Co-ops (and sometimes condos and homeowners’ associations) want the closing price to be (artificially) higher to maintain their average price per square foot. They don’t...
info_outlineThis happens when the buyer agrees to a higher contract price, but the seller also agrees to credit back a set amount to the buyer, so the net purchase price is lower.
For example, if the buyer wants the house for $250,000, they would set the contract price at $300,000 with a side agreement that the seller would credit $50,000 on the closing statement, effectively making the price $250,000.
Why not just a price reduction?
Co-ops (and sometimes condos and homeowners’ associations) want the closing price to be (artificially) higher to maintain their average price per square foot. They don’t want records to show that a unit sold for significantly less than other units, because, in theory, it will eventually drag down the value of the building. Even though a lower price is reasonable for a probate property that needs major renovations, it doesn’t benefit the co-op.
Sometimes cash buyers and investors want the recorded price to be higher, so they can show flip buyers a slimmer profit margin. For example, an investor pays $250,000, hoping to flip it for $350,000. When the investor goes to sell the property, the buyer can check the public records to see what the investor paid. It will show that the investor is trying to make a $100,000 gain. If the records show that the investor paid closer to $350,000, it won’t look like he’s making a large profit.
What can a seller credit be used for?
Non-professional executors and heirs are sometimes worried that the situation seems sketchy. They wonder if they are really allowed to give a seller’s credit. No worries; it is legitimate and fairly common.
In non-probate situations, it is most often used as an incentive to the buyer to cover some repairs or pay for closing costs. Sometimes repairs need to be done for the property to be sellable. It’s a way of putting the repairs on the buyer instead, when the estate is cash-poor or the executor just doesn’t have time.
Usually cash buyers only
A seller’s credit is mostly used for cash buyers for a few reasons.
There are often small credits for something like a broken stove. But sometimes there are legal issues with the property or major renovations are needed. If the credit is a large amount, greater than 10% of sale price, it makes the closing figures look non-traditional. Banks don’t handle that situation well, so a seller’s credit is usually not a good option for a buyer who needs to take out a loan.
Selling a probate property has many nuances; it’s not the same as a regular house sale. You may have sold your home once or twice and figure that selling probate real estate is easy. The reality is that probate real estate can be very different.
To learn more about what to expect during probate, check out my book, “How Probate Works, “ available on Amazon.
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