DEALING WITH INHERITED HOMES: BEST PRACTICES FOR FAMILIES
Dealing with an inherited home is a complex subject, and there are several complicated issues to resolve.A web search for “selling inherited property” returns more than 10 million results. A glance down the first page or two shows some of the issues:
• Do You Pay Capital Gains Taxes on Property You Inherit?
• What Taxes Are on an Inherited House?
• If You Inherit a Home Do You Qualify for the $250,000 Home Sale Tax Exclusion?
• What to Do When You Inherit Your Parent’s House, Home Inheritance Issues, and on and on.
Additionally, it is not uncommon for a person selling an inherited home to have a sentimental attachment to the property, with the sale being the result of a recent death in the immediate family. This adds an emotionally overwhelming component to the transaction.
Because of continuing property ownership obligations such as property taxes, insurance, utility bills, household and grounds maintenance-in addition to any issues with the settlement of the estate-a rapid sale is often necessary. Getting a loved one’s house ready for the market can be anxiety-provoking, emotional, and stressful. It likely includes clearing out once-treasured belongings and depersonalizing the rooms.
Then there is the financial cost of making necessary updates to attract buyers. Sometimes heirs must deal with liens or hidden problems in the house structure or systems (i.e., electric, plumbing, and gutters), and there may be disagreements among beneficiaries about the sale price, or whether to sell at all.
Family members drag their feet, distracted by images of growing up in the home, preventing them from springing into action. They can’t let go.
Everyone takes their time to deal with the passing of a loved one. Sellers in this situation need to take the appropriate steps to learn the market, educate themselves and have a reliable real estate agent and a tax attorney or Certified Public Accountant (CPA), someone who is going to be empathic and is there to help.
This blog series is meant to offer some proven tips that can help owners of inherited property approach the issue in a structured manner, with fewer problems and more satisfactory results for all stakeholders concerned. Here, we will discuss the different aspects of splitting the property with family members and the best practices involved.
Stay tuned for part 2.