Tips on Inheriting a Home
The process of inheriting a home from a family member or a friend can be overwhelming, on top of dealing with the loss. You must account for several factors when inherit property, including tax implications, the mortgage status of the property, the condition of the home and the state of mind of your relatives. Also, you must investigate the process by which you will inherit the home, whether through a will, a trust or through probate proceedings.
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Instructions
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Check the mortgage status of the property. Inheriting a home that is not paid for has few drawbacks. If you inherit a property that is mortgaged, you will be responsible for the payments and debt.
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Investigate the property value assessment. This assessment will dictate the annual property taxes owed for the home. Some municipalities require that a property be reassessed when the deed changes hands, even for an inheritance. Other jurisdictions do not require a fresh value appraisal when you inherit a home. Depending on the current value of the property, you may be subject to an inheritance tax, a gift tax or capital gains tax. Generally, any property valued above $1 million may be subject to one or all of these taxes.
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Arrange an inspection for the property with a licensed appraiser. Verify the condition of the home before you sign any paperwork accepting the deed for the property.
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Discuss the inheritance with your relatives that may feel entitled to the property. Resolve any disputes as best as you can before the finalization of any paperwork. A relative can contest the transfer of any inheritance property, no matter how well a will or trust is established. Such a legal contest may tie the home in probate court for years. If a relative threatens to contest the will or trust bequeathing you the property, consider selling the property immediately and splitting the revenue with the family member.
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