How Do I Change the Title on a House I Inherited?
Inheriting a house can be a difficult matter during the emotional time after a loved one dies. Legal, tax and family problems can arise and may cause delays in disposing of the estate. A clear understanding of the laws and steps to be followed when changing the title of an inherited house will simplify the process.
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Instructions
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Get legal advice. Some states require a lawyer to change title to an inherited property, while others permit an individual to do it with the assistance of the court clerk's office. Be sure that you or your lawyer are familiar with the legal requirements of the state where the deceased's house is. All states require a deed to include the name of the grantor and the grantee, as well as the legal description of the property, but other requirements -- such as having witnesses to signatures -- vary by state.
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Ensure that probate of the estate is established and that an executor or personal representative is appointed by the courts. This is necessary to begin disposition of the entire estate, including any houses or other real estate. The executor advertises in local newspapers for any outstanding creditors to come forward with claims against the estate. This step is crucial for establishing whether the house must be sold to pay off creditors.
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Have the property evaluated on a stepped-up basis immediately to minimize potential capital gains taxes. This establishes the fair market value of the house as of the date of the grantor's death. If the value is not "stepped up," when you sell the property, capital gains tax is owed based on the increase in value of the house from the date the deceased purchased it.
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Research how to petition probate court to start a proceeding to transfer the title into your name. In some jurisdictions, this is the responsibility of the executor; in others, it is up to you as the grantee to initiate the process. There may be a small administration fee to do so. All states allow title to be transferred from the deceased in the case of inheritances.
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Tips & Warnings
Refer to a lawyer if this is a spousal inheritance, as the procedure and tax treatment for changing title are different in such cases from other types of real estate inheritances.
If the person who died owes money to creditors that is greater than the amount of the estate that's left, the house may have to be sold to settle these debts.
