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Inheriting your parents’ house? Probate advance services can help make ends meet while you wait for your inheritance to clear.
Inheriting a family home can bring up fond memories and bittersweet emotions. Unfortunately, it can bring up complications too. Perhaps the property is in debt, the house needs major renovations, or multiple siblings have inheritance rights.
In this post, the professionals at Rockpoint Probate Funding talk about what to do and what to consider when inheriting your parents’ house.
Options When Inheriting Your Parents’ House
When inheriting your parents’ house, you can typically do the following:
Live in It
You often have the right to live in the home you inherit. However, there are many factors to consider before going this route. Does the house have a mortgage? Does anyone else have a legal claim to the property? How much repair work is necessary? When you move into a house, you assume a great financial responsibility including mortgage payments, property taxes, and maintenance costs.
Hold It
Even if you don’t want to live in the home, you may not want to part with it either. In that case, you could opt to rent it out. You may look for long-term tenants or offer short-term vacation rentals, depending on the local housing laws.
Sell It
Many people prefer liquid cash to real estate inheritances. Selling is also the easiest way to divide an inherited house among siblings or beneficiaries. Otherwise, you may have to buy out the other heirs if you want to keep the property. Note that you may have to pay capital gains taxes if you sell the home without living in it first.
Costs To Consider When Inheriting Your Parents’ House
While inherited property represents a potential financial windfall, it can also cost money. Some payments come from the estate funds, but other financial obligations will fall on you. When inheriting your parents’ house, consider the following:
- Probate expenses: Depending on your parents’ estate planning, their property may have to go through probate to determine the new legal owner. Probate costs may include court fees, appraisal fees, and legal fees.
- Inheritance taxes: Inheriting your parents’ house can have state and federal tax implications. Many inherited homes qualify for a step-up in basis, which reduces the heir’s liability by adjusting the property value to the fair market value upon inheritance.
- House clearing: Removing your parents’ personal belongings may incur additional costs such as storage, dumpster rentals, or moving services. On the other hand, holding an estate sale or donating assets to charities for tax deductions may improve the bottom line.
- Property renovations: Whether you want to sell or use the home, it may require minor updates or major repairs. You don’t always have to renovate before listing a property, but it may affect the sale price.
- Outstanding bills: Look into any debts or bills owed on the property including mortgage payments, insurance premiums, property taxes, and unpaid utilities.
- Ongoing costs: If you keep the property, don’t forget to include the normal costs of home ownership in your budget. This may include the mortgage, utilities, maintenance, insurance, HOA fees, and more.
Steps To Take When Inheriting Your Parents’ House
Even if your parent(s) named you as the heir to their home, the property deed doesn’t typically automatically transfer to you. Instead, it must go through the probate process.
If you are not the executor, one of your first steps should be to speak with that person. You’ll want to identify your co-heirs and talk to them too. A probate lawyer or estate planning professional can be of great help during this time.
If you are the executor, your duties typically include the following:
- Finding the will: The will should state how the homeowner wants to distribute their property, including their home. In addition to locating the original will, the executor is responsible for determining if a will was revoked or replaced.
- Securing the home: You’ll want to lock windows and doors and take any other necessary steps to protect the property and any possessions. Unoccupied homes are vulnerable to vandalism, theft, and other damage. If you’re planning a family meeting to discuss estate details, using invitation printing for formal invitations can help create a professional touch.
- Assessing the property: Evaluate the home’s overall condition, including any repairs or renovations it may need. Also, consider requesting an appraisal if you want to sell, buy out, or insure the property. It can also help for tax purposes.
- Allocating possessions: The executor must locate, list, and value the deceased person’s belongings to ensure the right heirs receive them.
- Paying any debts: Research and pay any past-due taxes, utility bills, or other debts attached to the property. Also, cancel any unneeded utilities or transfer the name on those you want to continue.
- Evaluating the mortgage: If your parents didn’t own their home outright, you must repay the remaining loan amount when you inherit the property. Speak with the lender to understand the mortgage responsibility attached to the house.
After the home clears probate, you can begin the process of legally transferring ownership to your name.
Can Probate Funding Help You Pay Bills Now?
You may know you are inheriting your parents’ house, but what if you need cash now? To learn more about when you can expect to receive your inherited property, check out our page on collecting your inheritance. To access funds while waiting for your inheritance to clear probate, contact Rockpoint Probate Funding today!
Our easy three-step process lets you apply, have your case reviewed, and receive your funds in as little as one day. Contact us 24/7 to see if you qualify.
