Understanding Home Equity and Proceeds When Selling an Estate Home
What Happens to the Money After the Home Sells?
Once the property sells, the Executor or Administrator must ensure proceeds are distributed according to Pennsylvania law or the decedent’s will.
Here’s how that typically works.
Step 1: Pay Off Debts and Liens
Proceeds first go toward:
Mortgage or HELOC payoff
Property taxes owed
Utility balances
Realtor commissions and closing costs
Estate debts (medical bills, credit cards, etc.)
Step 2: Deposit Remaining Funds Into the Estate Account
After closing, net proceeds are deposited into the estate’s account, not a personal one. From there, your attorney oversees distribution per the will or intestate laws.
Step 3: Manage Disbursements to Heirs
Once all debts are settled, heirs receive their designated share.
We provide clear, itemized closing statements for legal and accounting purposes.
Step 4: Understand Tax Implications
Inherited properties often receive a stepped-up cost basis, meaning taxes are based on the home’s value at the time of death—not the original purchase price. This can greatly reduce capital gains tax when selling.
(Always confirm with your accountant or estate attorney.)
“Shaina made sure we knew exactly what to expect. Every penny was accounted for, and the process was stress-free.” — Estate Client, Blue Bell 2025
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