How to liquidate assets after parents’ death is a common problem among siblings. Some families suffer a lot of stress when settling the parent’s estate with siblings. There can be some disagreements about who should get what property. In some cases, these disagreements can cause damage to personal relationships.
When your parents leave a Will, most of the big stuff will be taken care of. The house, the vehicles, maybe the savings, stocks, or other assets, but what about the rest? What should you do with all the personal property, furniture, artwork, and trinkets left?
Sometimes, these small, memorable pieces of property are much more sentimentally valuable to the children close to their parents than any money. Because most of the time, they are not accounted for in the Will, deciding who should get what lies on the shoulders of the Executor, who will have to make difficult decisions.
Splitting up personal properties among family members can be more caustic than dividing up financial assets.
If you’re the one charged with managing the estate, the best way to keep the peace inside the family is to come up with an objective way to divide the property fairly. In this article, we will give you some strategies on how to liquidate assets after your parents’ death.
FOR EASIER NAVIGATION:
- Quick Guide On How To Divide Assets After The Death Of A Parent
- How To Liquidate Assets After Parent’s Death
- How Can We Help You?
- Additional Questions & Answers On How To Liquidate Assets After Parent’s Death
QUICK GUIDE ON HOW TO DIVIDE ASSETS AFTER THE DEATH OF A PARENT
Ways of liquidating assets after the death of a parent:
The Will Gives Instructions
Liquidating estate after death with a will. A will is a legal document containing written instructions on dividing the testator’s assets or the deceased. The “will” identifies assets and items in the estate and the transfer of assets after death. It may also allocate specific items to particular heirs. It also has a section assigning the estate balance to the heirs in some defined fractions.
The testator is not obliged to leave assets to family members. He can leave his assets to anyone by describing the bequest in a will. The will often name an executor; this person is in charge of navigating the will through the court-supervised probate process.
The court appoints an executor if there’s no one written on the will. As long as the will was prepared correctly under the state’s laws, the will is valid, and the probate court will enforce it.
Once the will is ruled valid by the court, the executor is selected, and several steps must be followed. There will be an inventory of assets and outstanding debts. Parties and creditors will be notified. The maintenance of the home will also be arranged until its fate is determined.
The term “intestate” describes a person who has died without making a will.
If the parents did not leave a will, or if the will is declared invalid, the property will be left to close family members under state intestacy laws. Laws differ by state, but all set a specific order of inheritance.
The computations as to who gets how much depend on the law. A spouse receives the most significant share in most states, with the deceased children next in line to inherit. The deceased’s siblings and parents follow in the order of priority.
Wills and intestate success laws divide property that goes into probate, but not all assets are included in the probate. When the owner dies, some assets are transferred directly to a named beneficiary, bypassing the probate.
One example is life insurance. If the deceased is named a beneficiary in the burial insurance policy, the payout goes directly to that person.
Beneficiaries can also be named for other assets like savings accounts, IRA retirement accounts, and Keogh Plans.
Funds set up as “payable-on-death” automatically go to the person named. The same happens to stocks and other securities held in a “transfer-on-death” account.
Real Property and Vehicles
If the deceased owned title to any property, the title dictates who takes it.
If two or more people are on the title with the right of survivorship, the property will be divided into equal parts for the surviving co-owners. If there is a transfer-on-death deed, the property or vehicle is automatically transferred to the person named rather than passing through probate.
A probate court order is needed to sell the house or transfer the deed when a family home is involved. In most states, notification of all heirs and other interested parties is required if there is a sell-off plan.
Selling a home before being granted authority by the court is an executor’s biggest mistake.
HOW TO LIQUIDATE ASSETS AFTER PARENTS’ DEATH
There is usually a houseful of items that can be valuable or sentimental and needs to be dealt with after the parents’ death. There are problems with siblings settling estates. Dividing the items must be done fairly so that each sibling gets the right items and the proper fraction of value without feeling left out or cheated. Here are some suggestions on how to settle an estate without a lawyer.
Before distributing personal items, it will be helpful to have a conversation with the siblings about how the sharing of the property should commence. Talking is best done early, like the day after the funeral, before the heirs take any action.
Here are some tips that may be useful on how to liquidate assets after parents’ death:
List what you love
Before starting the division of personal property, have the siblings write down ten items they want and why they want them.
Itemize five things with sentimental value and five things with monetary value. Share the list with everyone. If two siblings wish to get the same item, let them negotiate to know who gets what. They can trade, give up something, or split the item. You may be surprised how easy it can be to divide property once the lists are written out.
Take turns to pick
With this system, you can select according to birth order to decide who goes first, going from youngest to oldest or vice versa. However you determine the order, change it every round to make it as fair as possible. The person who goes first in the first round must last in the second round. Continue selections in this order until all the desired items have been claimed.
Then if the firstborn ends up with the painting that the youngest wanted, they can negotiate between the two after all of the selections have been made.
Roll dice or draw straws
Siblings roll dice, with the winner of the first roll receiving the first turn, the winner of the second roll taking the second turn, and so on. The selection order is reversed after the first round. After two rounds, siblings roll the dice again to start a new order.
Alternatively, they can draw straws to determine the order of choice.
Use colored stickers or post-it notes.
Give each family member a colored sticker or post-it note, with the color assigned to each one. Get the sibling to place colored labels on the items they want to keep. Any items which only have one colored sticker will automatically go to that person. However, any items with more than one sticker can be further negotiated later.
Use a Lottery
Write each item and a brief description of each item on a slip of paper, for example, the mother’s mixing bowl. Put the slips of paper in a box, and then the siblings can take turns drawing the items on the slip of paper until the box is empty.
Have the siblings each draw a number, and then have each person start choosing one favorite item.
For example, one of the bedroom sets, the living room furniture, the dining room suite, etc. Continue until all the larger furniture and all the sentimental items are gone. If two people wanted the same item, they could work it out privately. The number order will dictate who gets it if they cannot agree.
Hold a Family Estate Pre-Sale
Estate pre-sale is an excellent option if the siblings plan to use an estate sale to clean out the house. Let the estate sale company come in and price all of the items. Then the siblings can select what they want to keep before the scheduled sale to the public. The value of the items they choose will be deducted from their share of the sale proceeds.
Get an Appraisal
If the parents left some highly valuable items but were not included in the will, it is worth getting the assets valued to make distribution fairer. Bring in an appraiser to provide an objective market value to the higher-end items.
For example, if there’s a painting valued at five figures, ask the recipient to pay the amount to the other siblings to compensate. You can have its value deducted from your share of the estate, pay the other siblings for it, or it can be sold and the proceeds divided among them.
Hire a Mediator
Hire a professional mediator or have the parents’ estate attorney come in and handle the distribution of personal property. Hiring a mediator is the best option if the siblings can’t agree on who should get the items on the estate.
It will be relatively easy to decide on the ownership of items if a third party is involved. Hiring a mediator can keep the family intact during and after the estate settlement.
Return to giver
Any items the siblings give to the parents will be returned to the giver.
Hold a Family Auction
Auction the personal property off. Each sibling can bid on items using tokens such as poker chips or Monopoly bills.
Everyone starts off with an equal number of tokens. Then they bid on the items they want. One sister can spend her entire amount claiming the dining set, while a brother might spread his round on smaller items. You can use FairSplit if you want to work with a third-party company.
The balance of the estate items, including furniture, jewelry, electronics, tools, art, books, memorabilia, clothing, and household goods, can be fairly divided via a walk-through auction method. This is where each sibling interested in an item expressed their level of interest by bidding on each item.
The executor picks on each item and lets them bid on getting it. The highest bidder wants it the most.
Gather the siblings:
Start in one room with a pen and tally sheet:
- Pick up an item to be auctioned
- Ask if anybody is interested in bidding
- Let the siblings bid and outbid one another until the highest price bid is determined
- Give the item to the winner and write their name, the item, and the price bid on the tally sheet.
- Pick another item and repeat the process until all items are taken.
Everyone attending the auction has an equal chance of acquiring what they like. The winner can bring home the item without any out-of-pocket expense.
The executor can sum up what each sibling (brothers and sisters) bid in the auction. The total amount that each sibling bid and owes the estate is added to the liquidated value of the estate that will be distributed amount them. However, in calculating how much the distribution check each one gets, the total bids are subtracted from their distribution check amount.
Can non-heirs be allowed to bid and participate in the auction?
Yes, they can also be allowed to participate in the auction. If a non-heir can outbid the heirs, the heirs should be happy about getting more money on the item. The non-heir should pay the executor on the same day and receive the item after bidding. There’s no need for the non-heirs to wait to get the item on the settle-up day.
If the parents’ have an exclusive collection such as coins, stamps, or war medals, it would be worth putting those items in a specialist auction for a collector to buy. Employ a specialist auction service to do the valuation on the collection and help the family to place the items into the right auction.
Copy Photos and Videos
Family photos and videos can be difficult to distribute fairly among the siblings, but it is easy to copy. Copy family photos and videos and have digital images and videos distributed electronically.
You can also have printed photos copied into high-quality digital hardcopy images. Store the pictures in a flash drive and pass them on to the family.
Any items that the siblings do not claim can be identified and set aside to be:
- Sold through an estate sale (with proceeds remaining in the residual estate for distribution)
- Donated to charity (talk to an accountant to see if the donation can have a beneficial tax implication for the estate)
- Craigslisted or put on eBay
- Left at the curb with a free sign
For most families, a combination of these methods is usually appropriate, as there may be many things to sort out from the parents’ home. When settling the estate with siblings, the most important thing is to keep the family together. Dividing the estate fairly can preserve and enhance the family relationship.
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ADDITIONAL QUESTIONS & ANSWERS ON HOW TO LIQUIDATE ASSETS AFTER PARENTS’ DEATH
What is considered an asset at the time of death?
An asset is anything of value that can be converted into cash. This includes property, stocks, bonds, jewelry, and other possessions. Many people choose to liquidate assets after the death of a parent to settle any debts or final expenses.
What are the methods of liquidation?
There are a few different methods that can be used to liquidate assets. These include selling the property, auctioning off the belongings, or simply cashing out the assets. Each method has its own advantages and disadvantages, so it is important to choose the one that best suits your needs.
Why is liquidation important?
Liquidation is important because it allows the heirs to receive the full value of the assets. If the assets are not liquidated, they may be subject to probate or other legal proceedings, which can significantly reduce the amount of money the heirs receive.
How do I liquidate my parents’ assets?
The first step for large estates is to contact a professional liquidator. They will be able to help you determine the best method of liquidation for your specific situation. Once you have chosen a method, they will work with you to ensure that the process goes smoothly and that you receive the full value of the assets.
What is another name for liquidation?
Another name for liquidation is an estate sale. This is because the purpose of liquidation is to sell off the assets of an estate to pay debts or expenses. However, not all estate sales are liquidations. Some may be conducted for other reasons, such as raising charity money.
How do you liquidate the estate?
The first step is to contact a professional liquidator. They will be able to help you determine the best method of liquidation for your specific situation. Once you have chosen a method, they will work with you to ensure that the process goes smoothly and that you receive the full value of the assets.
What happens if I don’t liquidate the estate?
If you do not liquidate the estate, then the assets may be subject to probate or other legal proceedings. This can significantly reduce the amount of money that the heirs receive. Additionally, the estate may be responsible for any debts or expenses incurred after the parent’s death.
What assets can be liquidated?
Many people choose to liquidate assets after the death of a parent to settle any debts or final expenses. An asset is anything of value that can be converted into cash. This includes property, stocks, bonds, jewelry, and other possessions.
What’s the most liquid asset?
The most liquid asset is cash. This is because it can be easily converted into other assets or used to pay debts and expenses. Other assets, such as property or stocks, may take longer to sell and may not fetch the full value of the asset.
How do I know if I should liquidate an asset?
You should first speak with a professional liquidator if you consider liquidating an asset. They will be able to help you determine the best method of liquidation for your specific situation. Once you have chosen a method, they will work with you to ensure that the process goes smoothly and that you receive the full value of the assets.
What happens when you liquidate assets?
When you liquidate assets, you convert them into cash. This can be done by selling the property, auctioning off the belongings, or simply cashing out the assets. Each method has advantages and disadvantages, so choosing the one that best suits your needs is important.
What are the consequences of going into liquidation?
The consequences of liquidation depend on the method used. If you sell the property, you may not receive the full value of the assets. If you auction off the belongings, you may not receive anything. And if you simply cash out the assets, you may not have anything left to pay debts or expenses.
What does liquidation mean in death?
In death, liquidation is the process of converting assets into cash. This can be done by selling the property, auctioning off the belongings, or simply cashing out the assets. Each method has advantages and disadvantages, so choosing the one that best suits your needs is important.
How long does it take to liquidate assets?
The time it takes to liquidate assets depends on the method used. It may take weeks or months to find a buyer if you sell the property. The process may be completed in a few days if you auction off the belongings. And if you simply cash out the assets, it may only take a few hours.
What is the liquidation process?
The liquidation process is the process of converting assets into cash. This can be done by selling the property, auctioning the belongings, or simply cashing out the assets. Each method has its advantages and disadvantages, so it is important to choose the one that best suits your needs.
What does it mean to liquidate property?
To liquidate property means to convert it into cash. This can be done by selling the property, auctioning the belongings, or simply cashing out the assets.
What is the first step in the liquidation process?
The first step in the liquidation process is to contact a professional liquidator. They will be able to help you determine the best method of liquidation for your specific situation. Once you have chosen a method, they will work with you to ensure that the process goes smoothly and that you receive the full value of the assets.
Can you empty a house before probate?
It is generally not advisable to empty a house before probate. The court may order that the property be sold to pay debts and expenses. If there is no furniture or other belongings in the house, it may sell for less than it would otherwise. It is always best to speak with a professional before making any decisions or simply cashing out the assets.
How much does an estate have to be worth to go to probate?
There is no set amount that an estate has to be worth to go to probate. However, the court may order that the property be sold to pay debts and expenses. If there is no furniture or other belongings in the house, it may sell for less than it would otherwise. It is always best to speak with a professional before making any decisions.
What is the difference between probate and liquidation?
Probate is the legal process of distributing a person’s assets after death. Liquidation is the process of converting assets into cash. This can be done by selling the property, auctioning the belongings, or simply cashing out the assets.
Is liquidation the same as bankruptcy?
No, liquidation is not the same as bankruptcy. Liquidation is the process of converting assets into cash. This can be done by selling the property, auctioning the belongings, or simply cashing out the assets. Bankruptcy is a legal process that may be used to discharge debts and protect assets.
What are the disadvantages of liquidation?
The main disadvantage of liquidation is that you may not receive full value for the assets. If you sell the property, you may have to pay real estate commissions and other fees. If you auction off the belongings, the auction house may take some of the proceeds. And if you simply cash out the assets, you may not receive full value for them.
Who appoints a liquidator?
The court usually appoints a liquidator. However, in some cases, the creditors may appoint a liquidator. This is usually done in cases where there is a dispute over the estate’s assets.
What is the responsibility of a liquidator?
A liquidator’s responsibility is to convert the assets of an estate into cash. This can be done by selling the property, auctioning the belongings, or simply cashing out the assets. Each method has its advantages and disadvantages, so it is important to choose the one that best suits your needs.
Who gets paid first in a liquidation?
The creditors are usually paid first in a liquidation. This is because they have a legal claim to the estate’s assets. The beneficiaries may receive some of the proceeds, but they are not entitled to all of them.
What is the summary procedure for liquidation?
The summary procedure for liquidation is a simplified process used in cases where the estate does not owe any money to creditors. This process can be completed in as little as six weeks.
What does liquidated mean in law?
When an asset is liquidated, it is converted into cash. This can be done by selling the property, auctioning off the belongings, or simply cashing out the assets.
How long does it take to liquidate an estate?
The time it takes to liquidate an estate depends on the method used. If you sell the property, it may take several months to complete the sale. If you auction off the belongings, the auction may last several days. And if you simply cash out the assets, it may only take a few days.
What happens to the contents of a house when someone dies?
The contents of a house are usually sold or auctioned off when the owner dies. However, in some cases, the beneficiaries may be able to keep the belongings. It is always best to speak with a professional before making any decisions.
What happens if you don’t probate a will?
If you don’t probate a will, the estate’s assets will be distributed according to the laws of intestate succession. This means that the beneficiaries will not receive what they are entitled to under the will. In addition, the estate may have to pay taxes and other expenses that could have been avoided if the will had been probated.
How long does probate usually take?
Probate usually takes about six months to complete. However, it can take longer if there is a dispute over the estate’s assets.
Can you probate a will without a lawyer?
Yes, you can probate a will without a lawyer. However, it is always best to speak with a professional before making decisions.
What order of payment is adopted by the liquidator?
The creditors are usually paid first in a liquidation. This is because they have a legal claim to the estate’s assets. The beneficiaries may receive some of the proceeds, but they are not entitled to all of them.
Is any of the above legal advice?
You should double-check with a qualified estate professional in your state to ensure you fully comply with your state’s legal requirements.