Inheriting your parents' home also means inheriting the financial responsibilities tied to the property, including any outstanding debts and ongoing bills. If these financial matters are not managed early, they can complicate the process of selling the house.

Address the Financials Early

"Figuring out the financials of the house needs to be dealt with early on," advises Ryan McKee, a California real estate agent and probate specialist who helps clients sell their parents’ homes after they pass away. "Your agent can assist you in determining if there’s an existing mortgage, who the lender is, and how payments are being made, whether by direct debit, online payment, or check."

Secure Access to Financial Accounts

If your parents' bills were set up on automatic payment, it is crucial to ensure there’s enough money in their bank accounts to cover these charges until the house is sold. Gaining access to these accounts can be challenging if you are not a joint account holder or a named beneficiary. You will also need to gather login information for any online accounts and arrange to have your parents' mail forwarded to you so that you can stay on top of their monthly bills, especially those related to the upkeep of the property.

Conduct a Title Search if Needed

In some cases, a home may have liens or judgments, such as overdue property taxes, a home equity line of credit (HELOC), or a reverse mortgage. If any of these financial obligations exist, you might need to run a full title search to identify and resolve them before the house can be sold.

Notify Creditors and Submit the Death Certificate

Once your parents pass away, it is essential to notify creditors and submit copies of the death certificate to relevant parties, including the credit bureaus and the Social Security Administration. Doing so will help prevent any miscommunications or unexpected debts from arising during the probate process.

Key Accounts to Track

As you sort through your parents' finances, be sure to locate and manage the following accounts and bills:

  • Checking and savings accounts, retirement funds (401K, CDs, etc.)
  • Property and personal tax records
  • Mortgage payment records
  • Home Equity Line of Credit (HELOC) or reverse mortgage statements
  • Utility bills (water, electricity, sanitation)
  • Medical bills and credit card statements
  • Insurance policies (home, life, auto)
  • Communication services (landline, cell phone, internet, cable TV)
  • Household service expenses (gardener, housekeeper, healthcare providers)
  • Homeowners association dues

Some services, such as cable and internet, can be canceled immediately, but most other bills will need to be paid until the home is sold and the accounts are closed.

In Conclusion

Sorting through your parents’ finances after their passing is an essential step in preparing to sell their home. By taking care of these financial matters early, ensuring bills are paid on time, and resolving any outstanding liens or mortgages, you can prevent delays and complications in the sale process.

Staying organized and working with a probate specialist and an experienced agent will help you navigate this challenging time with greater ease and efficiency. When you are ready to start the process, don’t hesitate to reach out to Scott and the Smolen Team. With their experience, they will guide you through every step, ensuring a smooth and successful transaction.