Q: I’m selling my deceased mother’s home in Mayfair and the title company is asking for an inheritance tax return. I’m happy to provide everything they are asking for, but why do they need the inheritance tax return?
A: When conveying the title of a home to a new owner, the title company needs to make sure the property is clear of any encumbrances, liens, unpaid utility bills and mortgages, etc. If you’re the executor or administrator of an estate, the title company will need proof that you’re legally able to sell the property and that you’ve paid inheritance taxes. If no inheritance taxes have been paid on the property, they will escrow money to pay the taxes due at sale.
Here is list of things the title company will ask you for if you’re selling an estate:
1. The Death Certificate
2. A copy of the Inheritance Tax Return, if it’s been filed
3. A Short Certificate: A Short Certificate is a document that is certified proof of the appointment of the Estate’s Personal Representative (Executor or Administrator). It is required to gain access to the assets of the decedent.
4. If there’s no Short Certificate, you’ll need a Letter Testamentary or a Letter of Administration. These documents are issued by the Register of Wills authorizing a particular person to act as the personal representative of the estate. If the person died with a will, the document is referred to as Letters Testamentary. If the person died without a will, the document is called Letters of Administration
Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.