How to Liquidate a Loved One's Estate

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When someone you love dies, at first, you may only be able to think about the emotional things: How you will miss them, how different your life will be without them, and maybe, if they were suffering, a sense of gratitude that their pain has ended.

Unfortunately, most of us also have to deal with logistics when someone in our family departs this world. If you are named executor of the estate, the heirs have the right to expect you to turn over their inheritance in a timely manner. Part of settling an estate is dealing with the personal possessions of the deceased. Often this must be done before the house or condo can be sold, or the lease terminated, and the estate closed out. The more possessions the departed owned, the more difficult this task can be. Some triaging is in order.

Before death

If your loved one is elderly, it's a good idea to encourage and help them to dispose of clutter and organize their possessions as an ongoing project. Focus on how discarding piles of old newspapers could make their home safer, or on how those clothes from the 1940s might be appreciated by the high school theater department. A wonderful project to do with an elderly loved one is to organize old photos, because there may be people in them that you can't identify without their help. (See also: Why Holding Onto Too Much Stuff Is a Burden for Your Loved Ones)

While doing these projects, if it feels right, you can gently inquire about any items they might be saving for particular family members, which is especially helpful to know if the person hasn't created a detailed will. The process may be frustrating and time consuming — after all, they may have had this stuff since before you were born, and it can be understandably hard to part with such things. But the more you can do with the cooperation of the property's owner, the easier things will be after they're gone. You run less risk of accidentally disposing of important papers or family treasures.

Sometimes the decluttering process is prompted by a move. When my elderly cousin had to move into assisted living, my family and I gradually cleared out the house she had been living in for decades. While she wasn't able to help us on site, we were able to set aside possessions we thought she might want to keep, bring them to her new home, and have her make decisions. Many of the old photos and letters we found were great conversation starters during our visits, especially when her memory began to fail.

Immediately after death

If your loved one was living in their home up until the day they died, you may need to check on the home immediately after leaving the hospital, to make sure it's secure and safe. Of course, if your loved one had pets, they must be attended to and rehomed without delay.

Within the first week, you'll want to clear out the kitchen to prevent problems with pests, mold, and odor. Clean out the refrigerator and get the trash out of the house. Discard or give away any nonperishable pantry items.

If you have not already done so, you may also need to immediately look for items to be used in the funeral. If your loved one is not being cremated, you may need to retrieve a nice outfit for the body to be dressed in. It's common to display photos, awards, and other mementos at funeral services, as well. If you're writing the obituary, you may find useful information in the home, such as school yearbooks or scrapbooks. Any record of military service is important to gather, so that your loved one can receive the posthumous honors they are due.

After the funeral

A few years ago, my family lost an uncle who was the last of his generation. After the funeral lunch, we gathered in his home and experienced the strange feeling of being allowed to roam through his rooms uninvited. I suspect even my eldest aunts felt a bit like naughty children. We were all sad, but it was also a little bit … fun.

On your first visit to start sorting through the home of the deceased, take a deep breath and look around so you can remember how the home looked when they lived there. Remember that while the task you are undertaking will be difficult and sad, it may also be exciting, because you could uncover letters and other relics from the past that may help you come to know your loved one better than you ever did when they were alive.

Here are a few steps to make the task of clearing out their belongings less stressful.

1. Sort through it all

There are two ways to sort through the personal possessions in the home of the deceased. One way is to comb through everything yourself, which can be exhausting. The second way is to hire an estate sale company to sort through everything for you. Many reputable estate sale companies offer sorting and trash removal as part of their service. In fact, they advise that you throw nothing away, because you might inadvertently chuck something of value. I actually tossed an old automobile company shareholder brochure into the trash while sorting through my relative's home, only to have second thoughts and retrieve it. It ended up selling for $20. (See also: 12 Financial Moves to Make When a Loved One Dies)

In exchange for preparing and conducting the sale, the estate sale operator keeps a percentage of the proceeds, and may also charge fees. Such an arrangement could save you a lot of work. However, keep in mind that if you don't sort through the home yourself, you may miss items of sentimental value that you didn't know were there. The sale operator may promise to set aside any family photos and documents, but they won't know as well as you know what you would want to keep.

This happened to me. A few months after my cousin's estate sale was over, I was online researching her obituary. Imagine my shock when I found, online, images of her original baptismal certificate and her parents' wedding certificate, written in Slovak calligraphy. These documents had apparently been sold on eBay, but I couldn't find the original listing so I had no chance to contact the buyer or seller. The most charitable assumption I could make was that the estate sale company had inadvertently sold these items that obviously fell into the "sentimental value" category.

If you decide to do the sorting yourself, I have a few recommendations based on experience:

• Bring a friend or family member along for help.

• Drag trash and recycle bins through the home as you work.

• Pack up boxes of papers to sort through in the comfort of your own home.

• Don't throw away anything old before checking its value. You'd be surprised what people buy on eBay!

2. Make sure that heirs get a chance at keepsakes

Beyond any specific property named in the will, you probably want to make sure that everyone who was close to the deceased gets a memento to remember them by. This is tricky territory, because many decadeslong family fueds have started over granny's handmade quilts or even Uncle Joe's second-best TV trays. Some families may leave this task to the closest surviving relative.

But if there are a number of survivors of equal status, you might need a more formally mediated approach. After my great uncle passed, my family used an interesting method of distributing property of both sentimental and practical value: a family auction. All the heirs walked through the house and bid on the items there, with the moderation of an auctioneer. Every dollar they paid went into a pot, later divided equally among them. You can do such a private auction before an estate sale, or in place of one. Another system is to run an auction with points instead of cash, with each relative starting with the same number of points.

3. Sell what can be sold

If you decide to hire an estate sale company, interview and research the candidates carefully. The online review website Angie's List reports that Auction Services listings, which include listings for estate sales companies, make up one of its most complained-about categories. Thirty percent of those reviews score a D or F from customers.

Before a sale, you should remove anything from the house that the family intends to keep. Make it clear to the auction company what you're keeping, because they will base their prices on the amount they estimate they can make from the sale. If a sentimental item is too large for you to remove before the sale, make sure the sale company clearly marks it as not for sale.

Assuming you do want an estate sale, it's not a given you'll find an estate sale company that will agree to work with you. If the house has a lot of stuff but no high-value items, many estate sale companies will refuse to take on the job because they typically earn their money by keeping a percentage of the sale's proceeds.

In that case, you may be forced to run the estate sale yourself, list items in the local paper, or find a low-end operator to take the job on the cheap. Make sure to check the local regulations before advertising a garage sale.

4. Dispose of what can't be sold

Once you're down to items that no one in the family wants that also aren't worth enough to sell, your next step is to donate what you can to charity. Typical items in this category are: used clothing that doesn't qualify as vintage, worn furniture, and everyday dishes. The most expeditious way to get this stuff out of the house is to request and schedule a pickup with a local charity. Goodwill, Salvation Army, and Habitat for Humanity are three that commonly make pickups; your area may have these or others. If you don't find a charity that will pick up your items, you could pay movers to deliver the stuff to the nearest resale shop, or deliver it yourself.

Try to avoid dumping stuff on the curb — some cities will fine you for this. If you can't get a charity to take the items, you could list them on Freecycle or advertise them on Craigslist as available for free. Also, some newspapers don't charge to print ads for free items.

5. Pay for junk removal if you must

If you're able to do the work of getting the junk out of the house, check with your local government offices to see if you can get a large trash receptacle parked at the curb or schedule a large item pickup for free or at a low cost. You can also check with your local home improvement store; some now sell large heavy duty bags or bins that you can fill with thousands of pounds of junk and call them to pick up. The bag option usually costs only about $150-$200, compared to about $300-$850 to rent a trailer-sized trash receptacle for a week and have it hauled away full. Cost really depends on your area and the amount of stuff you're tossing.

The more expensive option is to pay a full-service junk removal company that will come into the home and remove everything you ask them to. These companies may charge $500 per truckload. On the upside, the work for you is minimal.

Once you have removed, given away, sold, donated, or thrown away every last item in your loved one's home, you're ready to bring in a housecleaner for a thorough cleaning, and list the home for sale.

This is a good time to devote some attention to the mementos that you decided to keep in your own home. Display knickknacks in a case, hang a framed photo on the wall, or get that ring resized so that you can see these precious things and be reminded of your departed loved one often.

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