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Inheriting property can be a blessing, an opportunity to preserve family traditions, and keep a beloved home within the family. It can also come with emotional and legal difficulties, put heirs at odds, and drag out the process of settling the estate.
First and foremost when you inherit a house, hire an attorney. An experienced legal advisor is critical in navigating this process, with or without a will. Following are some common questions, and the answers to help resolve problems quickly and fairly.
Is There a Will or an Estate Plan?
Whether you’re the estate owner or the heir, it’s important to have conversations about wills and inheritance while loved ones are still with us. Having a clearly defined plan for the estate after the passing of the owners ensures that the heirs know exactly what to do. AARP offers great advice on how write a will to help heirs avoid confusion or worse, fighting in probate court over the property.
It’s a smart move to meet as a family with a trusted attorney, to clearly define expectations. Talking about death is hard – trying to sort an estate while mourning is even harder.
Our Parents Didn’t Choose an Executor – Who Is in Charge?
Your family should get together to determine who is most capable of handling the process. All heirs should be consulted on decisions, but there’s typically a point-person who deals directly with third parties, such as lawyers and Realtors.
Consider practical factors, such as a candidate’s location, when choosing the executor. If you inherit a house in Miami, choosing a family member who lives in Philadelphia doesn’t make sense. By law, heirs inherit equitably, so keep in mind you’re simply choosing the “team captain,” not determining who gets what.
In the absence of a will, you will still need to gather as much documentation as you can. Forbes provides a comprehensive list of items to look for and how they can help. For example, you’ll need any and all financial and tax documents you can find.
The most important thing to remember when you inherit a house is that if there are multiple heirs, everything is inherited equally (unless specifically stated otherwise in a will). Therefore, communication and agreement between all heirs must be established quickly and maintained consistently. You’ll need to consider various scenarios, including co-ownership/landlordship and buy-out options. Rocket Mortgage outlines some of the most common situations in this very useful guide for multiple heirs.
Should We Sell? When?
It’s best to attend as soon as possible to the decision about keeping or selling the property. Unavoidably, the property still requires upkeep and bills continue to arrive for utilities, property taxes, insurance, and more. If the home falls into disrepair or gets behind in taxes, it will take even more time and money to fix these problems as the months or years pass.
If you decide to sell the inherited property, consult with your attorney to ensure that ownership is in the heirs’ names, giving you the legal right to sell. There are also tax implications to consider, such as capital gains. This concise guide from Smartasset.com can help you assess your situation and enlist the right people.
What If Family Lives in the Inherited Home?
Keep tenants, family or otherwise, informed. If the tenants are heirs, stipulations can be made, such as buying out the others. If they’re not heirs and the home is being sold, they can purchase it via traditional means, or simply continue to pay rent if the heirs choose to keep the status quo.
Otherwise, any tenant should receive at least the minimum state-mandated time to relocate. If a lease is in place, consult with your attorney regarding compliance.
Should We Sell As-Is or Make Repairs?
Making this decision will be easier with the advice of a Realtor, who will help you get an appraisal and understand the neighborhood’s market.
The Realtor will also help you avoid the common pitfall of emotionally charged decisions. For example, you may feel that your inherited home has a higher market value than it actually does, because it is deeply personal to you. A real estate professional will mitigate this emotion with an objective voice.
The process of completing major maintenance work can become difficult when multiple heirs are involved in the many big and small decisions. Determining how to cover the costs can also become complicated.
Unless renovations are required to secure a buyer, the most stress-free option is to remove all personal items, have the home professionally cleaned, and show it empty or staged.
Indeed, in my experience as a Realtor, I have seen that staged homes consistently sell faster and for a higher price.
If you’ve inherited a property and are trying to decide on next steps, please call me for a stress-free consultation. Monica S. Betancourt (305) 632-7248.