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Many children have no experience in the property world, so detail your wishes around the family home

Before Ashley Carlson’s father died of cancer in 2016, her only experience navigating the property world was finding a place to rent. As executor of his will, Carlson had to clean out and sell his home and a holiday home, both situated a few hours away from where she lives.

Much of the work fell on Carlson, then 28, since the other beneficiary was her older sister, who lived too far away. After finding an estate agent with experience of estate sales, Carlson got up to speed on everything, including the repairs that needed to be made to both homes, and told her father’s friend, who had been staying in the holiday home, that he would have to find a new place to live.

“There were a ton of things that were new for me, and it was all overwhelming,” Carlson recalls. Fortunately, the house and holiday home sold a few months after they were listed.

Dealing with the death of a parent is challenging, but selling their home can be fraught with unexpected problems, particularly if the parent dies without a will, says Ricky Opperman-Knipe, Sentinal International’s group marketing manager.

Grieving relatives may be unable to make decisions, leaving homes that may have already languished to fall further into disrepair, say agents. Siblings may harbour emotional attachments and may have unrealistic expectations about what the property should sell for.

The task can be a difficult and long process, or relatively quick and painless. Much depends on the heirs’ ability to ask for help, and hiring a professional who knows the local housing market.

Experts say the sooner the process begins, the easier it will be. Parents can take steps while they are alive to help avoid contentious complications. Richard Hardie, chief executive of Knight Frank SA, says: “As people get older it is important to plan for death. Many people don’t want to think about it and just brush it all under carpet. They don’t think they need to have those conversations, and/ or they think everyone will be able to sort it out once they are gone. 

“Planning is definitely a good idea. Having that conversation is important, and so is having your property valued every few years and updating your will accordingly.”

Carlson says one regret was that she was in such a “go mode” dealing with her father’s property that she failed to anticipate the wave of emotion that would hit when it was over.

“Once everything closed and the final cheques were disbursed, it was kind of this moment of ‘Oh my, I haven’t even processed anything that has just happened over the last year and a half’.

“You obviously have to let some of the emotions in. “I wish in hindsight that I had allowed that to happen a little bit more, so that when everything was finally closed, it wasn’t such a feeling of ‘Well, what do I do with my time now’?

Dying intestate means problems for your loved ones

By Ricky Opperman-Knipe

PONDER One may not want to think about one’s own death, but dying without a will put your heirs at a disadvantage. Picture: Supplied

The planning, drafting and signing of a professionally drafted last will and testament is one of the most important decisions you can make. Should you die without a will, the state will decide who your heirs will be.

This is regulated in terms of The Intestate Succession Act 81 of 1987, and while this usually means your immediate family inherit, this may not be what you wanted, especially in situations where you might have lived in a long-term relationship without getting married.

While you can leave your estate to whomever you choose, a professionally drafted will takes into consideration how you are married. Married in community of property means your spouse automatically inherits half of your combined nett estate. Being married by ante-nuptial contract means that whatever you own is yours to do with as you please.

However, being married by ante-nuptial contract with the accrual system means that on death, a calculation is done to ascertain which of the parties’ estates grew most. The person with the least growth then has a claim against the person with the most growth. This may mean the estate needs to sell assets to pay this claim.

Proper estate planning allows a person to contemplate what happens to his or her estate on death. Perhaps you want to set up an intervivos trust for assets. 

What would happen to funds/assets due to minor children or offshore beneficiaries? Who is going to be the executor of your estate, responsible for the administration of the estate, or trustees who administer any trust? Is there sufficient liquidity in the estate to cover liabilities and administration costs?

Often overlooked is a mortgage bond over a fixed property, especially when the property is owned jointly. Couples often assume a bond continues as is after death. The truth is that unless there is life cover to settle the entire bond, the bank or mortgagor expects the remaining party to apply to take over the bond.

If this person does not qualify for a bond on their own, they could have to sell the property. Complicating matters even more is if the deceased person died without a will and did not leave the property to the surviving party.

* Ricky Opperman-Knipe is Group Marketing Manager for Sentinel International

Regular valuation, planning will help avoid battle over parents’ home

FAMILY MUTTERS Sibling must agree to sell. Picture: Teddy Kelley

How children handle the sale of a parent’s home is often key to whether they end up staying a family, or never speaking to each other again. “Every parent’s worst nightmare is their children fighting over their stuff,” says lawyer Patrick Simasko.

Estate agent Jennifer Okhovat says she suffered through a drama-filled deal a few years ago when two siblings – a woman in her late 60s and her brother in his 70s – inherited their parents’ home. The house sat empty for five years before the children decided to put it on the market.

One sibling was ready to sell and move on, but the other kept saying “This was our parents’ home”, and would come up with exaggerated prices. Neither child wanted to buy the other’s share, she says. After months of discussions, the siblings gave Okhovat the go-ahead to list for about R18m.

Okhovat brought them more than a dozen offers, but every time at least one of the siblings found a reason not to sell. Even when the offers were above asking price, all cash and non-contingent, the siblings were never in agreement. The property was eventually sold a year later by a listing agent with another brokerage after one of the siblings died. “I think a lot of it was timing,” Okhovat says.

Her advice? Do your best to remove the emotion and really try to focus on the sale it as a business transaction.“Think of it as selling any other type of property you might own.”

Richard Hardie, chief executive  of Knight Frank SA, says many siblings fight, and unfortunately it is often money that comes between them after the sale of a property and the division of the amount fetched.  “Families do fall out, especially when a situation is thrust upon them without expecting it.

“If a valuation and planning is included and done every three years or so, that would help.”

*Washington Post and Property360 

Get all your paperwork in order

DETAIL EVERYTHING Make sure all your records and receipts for immovable property are up-to-date and easy to find. Picture: Supplied

When it comes to any immovable property you own, in addition to a will, prepare the following:

◆State where your title deeds are kept and record any outstanding bonds and all insurances (life and short term)

◆File up-to-date rates and taxes receipts

◆Reduce to writing any rental agreements you may have on any fixed property that you lease

◆State who collects your rent

◆State who compiles your yearly accounts

◆State where your water, lights and refuse deposit receipts are kept.

Who pays for what when heirs sell

INHERITANCE Transfer duty will usually be paid by the purchaser if heirs decided to sell a bequeathed property. Picture: Supplied

Fortunately, no transfer duty is payable on property left to heirs, and this applies even when the heirs agree to distribute the property or properties among themselves in a different way to that envisaged by the testator (redistribution agreement).

Conveyancing fees are, however, still payable. If the heirs decide to sell the property (out of the estate), transfer duty will then apply, but in most cases this will be paid for by the purchaser, says Ricky Opperman-Knipe, Sentinal International’s group marketing manager.

Survivor bond takeover

TRANSFER If you die without a will, this could delay the transfer of a bond into the surviving bond holder’s name. Picture: Supplied

To get a joint bond transferred into the surviving bond holder’s name, that person has to go to their bank and apply to take over the bond. Once all the necessary documentation is provided, and the application has been approved, the bond would then need to be registered in the deeds office again.

Having no will could significantly delay this transfer as the joint bond holder may not necessarily be an heir in the estate.