An estate administrator has a number of different responsibilities, but one of their main roles is to liquidate (which means to distribute or sell) the assets of an estate. Such liquidation can be helpful when it comes to paying off any debts that have been racked up by the estate, as well as expenses they have incurred, making the distribution of the remaining assets a lot easier.
The process involved in the liquidation of an estate is going to vary. When selling stocks and bonds, the way these assets are held is important to consider. On the other hand, if you are selling real estate, then you might want to consider hiring a broker and obtaining the necessary probate court approval.
Should You Liquidate Before the Distribution of Assets?
There are a number of reasons why it might be possible for you to liquidate assets before you distribute them. These include the following:
- You need to raise money on behalf of the estate in order to pay off debts and expenses that have been incurred by the owner of the estate.
- Liquidation will make it much easier for you to divide and distribute the remainder of the estate to the necessary beneficiaries.
- You can’t distribute the remaining assets in a fair way unless they have been liquidated.
How Do You Sell Stocks and Bonds from an Estate?
There are a few steps involved when you sell stocks and bonds from an estate. You tend to find that whenever someone owns different stocks, they will keep them in a brokerage account. In order for you to sell the necessary assets, you are going to have to gain access to these accounts. If you have been appointed as an executor, then a letter which confirms this appointment should be enough.
When you have access, there are two different means by which stocks and bonds can be held, and the way you sell them is going to depend on which applies.
- They held the stocks and bonds in an account
If the owner of the stocks and bonds held them in a non-physical form and simply kept them in their account, which has now been transferred to the executor, then you are going to need to get in touch with the broker. You will need to update the broker and then ask them to sell all of the stocks and bonds in order to liquidate them efficiently.
- They held the stocks and bonds in a physical form
If the owner prefers to hold onto their stocks in a physical form, such as bond certificates, then the process is a little bit different. You are going to need to obtain the original stock and bond certificates, as well as a physical copy of your appointment as the executor and a stock assignment form which has been signed by you and guaranteed by a commercial bank. If you cannot find the original certificates, they cost about £500 to replace. They need to be replaced before the stocks and bonds can be liquidated.
Liquidating Real Estate
When it comes to liquidating real estate, you are going to want to try and get a fair price for it so that it can efficiently pay off any debts that might be owed by the estate. In order to do this, you should be sure to get the property valued by a few different estate agents who are going to be able to provide you with a fair valuation of the property.
The amount you sell will depend on what kind of stake in the property the owner had. For instance, if they owned the property outright, then the whole property could be sold. On the other hand, if they owned a percentage of the property and other percentages are owned by other parties then you are only going to be able to sell that specific percentage.
If the property isn’t selling and debts need to be settled, then there is always the option for a liquidation auction. These are auctions where you will sell the property to the highest bidder. They can be quite effective given you are guaranteed that you will be selling the property on that day; however, the issue you have is that people go to these auctions for a bit of a bargain and therefore, the property is more than likely going to sell for below its market value.
Before the sale of the property, depending on how it was owned and what its value is will have an impact on whether or not the executor needs to obtain probate. This can be obtained through the court and is easy to keep track of, but it is a necessary step when it comes to liquidating an estate.
The Processes Surrounding Liquidating an Estate
If you have been appointed as an executor or administrator, then you will likely need to liquidate an estate’s assets to pay off some of the previous debts that were owed. Alternatively, liquidation will be necessary in order to divide the assets in a way which is fairer and more straightforward.
The processes involved in doing this can be complicated and are going to vary depending on what the asset is, how much it is worth and how much the previous owner of the estate actually owned. If you need help with the liquidation process, then it may be worth your time to enlist the help of professionals such as Simple Liquidation.
Simple Liquidation has a team of experts on hand who will be able to review your case, effectively understand your situation and provide information on the most efficient way to proceed. If you would like more information on how Simple Liquidation can help or have any questions about the process, please do not hesitate to get in touch.