Selling a family home comes loaded with logistical headaches and, in many cases, grief. These expert tips can help ease the pain when a family member passes away or moves into assisted living.
The legal hurdles
For families who are dealing with the death of parents or grandparents, the first hurdle often comes in getting legal permission to sell a home, says Brent Keele, Fort Collins-based estate planning attorney and founding partner of law firm Minor Keele Parke. It’s necessary even for those who left a will, and it usually happens in what’s called probate.
Probate is a court-led process that handles the deceased person’s financial assets. For families who were not left with a will, probate identifies beneficiaries of the house in addition to the rest of the person’s assets, Keele says. For those with a will, it enforces those last wishes.
However, probate is lengthy and can delay plans to sell. But it can also be a way to settle family disagreements, especially emotionally charged ones, Keele says.
“The court basically gives everybody their opportunity to be heard as to what they get or what they should get,” he says.
That doesn’t mean everyone gets what they want, Keele says, but it does serve as a third space where everyone involved can say their piece.
To avoid probate, families must plan ahead, he says. In addition to leaving a will, owners of the home must either add the home to a trust or execute a beneficiary deed.
A trust allows family members to put the house and other assets in one place along with an outline of who has authority to sell or manage the house once they pass, Keele says. A beneficiary deed transfers the ownership of the home to a designated person, he says. A beneficiary deed is a single-purpose tool that deals only with the family house, whereas a family trust serves as a “bucket” for all family assets that are immediately transferred to named beneficiaries upon death.
Another hurdle to clear is the capital gains tax, Keele says. That’s a particularly important consideration for families who don’t plan on immediately selling a family home, which is often the case if they are moving the homeowner into assisted living.
Beneficiaries who inherit a home that has appreciated in value are allowed to receive the first $250,000 in capital gains—or $500,000 for a married couple—tax-free, Keele says. This is an advantage, as capital gains is a hefty 20 percent tax.
When a family member dies, the capital gains tax reflects the current value of the home, not what the deceased family member paid for it, Keele says. This creates a major advantage for homes that have increased significantly in value, as most do.
But families who plan to hang on to a home for a while risk paying capital gains on a higher portion of the home value if it has an antiquated appraised value, Keele says. In that instance, he recommends getting a new appraisal to lock in the current value.
Working through emotions
The process of selling a home full of memories often triggers feelings of grief and nostalgia. Regardless of whether anxiety stems from getting the home ready to sell, pressure from family members or something entirely different, Robert Bundy, an individual and family therapist who founded Pursuit of Happiness Counseling in Loveland, offers the same advice: Take a pause.
Using logic, planning and reasoning can get you through the next moment and gives you agency to care for yourself in the future, he says. Remembering to simply breathe and regulate can also help soften a tense confrontation with a family member.
“The big piece is to recognize, in that moment, that everybody is human,” he says. “Allow them to have their moment. Let them go through it.”
When dealing with grief, Bundy says it’s helpful to think of what emotional instincts are kicking in. That allows you to conceptualize the experience and begin to take control.
“Grief produces the chemicals that cause you to question, ‘Am I safe or in danger?’” he says.
Relying on biological explanations removes blame and shame associated with those intense feelings, Bundy says. It offers some grace to all who experience grief, anxiety and other high-intensity emotions in these experiences.
“We’re not hardwired to think logically,” he says. “We’re hardwired to survive.”
