Inheriting a home- tips for a smooth transition
We have all had someone in our family who has passed away. There’s no denying death- it’s part of life. Even knowing that death will happen to all of us someday, the thought of preparing for your own or a loved one’s death can be emotional which may cause people undue stresses. This blog is to help ease those emotions and stresses. One aspect to consider is inheriting a home. Here are tips for a smooth transition:
- EVERYONE must be on the same page!
Some heirs want to live in the house; some heirs want to sell; some heirs want to rent; some heirs want nothing to do with the house at all. Regardless of the situation, everyone must agree, or the process will be even more complicated. What happens if not everyone agrees of what to do when inheriting a home? This could lead to more time needed in the court system, hurt feelings between family members, and/or more legal fees paid which could possibly be taken out of the profit from selling the house.
- Revocable Living Trust and a Will
More terms associated with inheriting a home: Revocable Living Trust and a Will. What is the difference? Is one better than the other? Do I NEED them? How do I get them? Lots of questions, lots of answers! More information can be found in this link from Nevada Corporate Headquarters: https://nchinc.com/legal-services/revocable-living-trust. In everyday terms, think of a Will like this: You are making a sandwich with all the fixings- meat, cheese, lettuce, tomato, sauces, spices, pickles, etc., but then you realize you do not have any bread. That sandwich won’t be able to hold itself together like that. Yet, you need the insides of the sandwich to make it complete. A Will is like the insides of a sandwich. A Revocable Living Trust is like the bread: holds everything together, but still needs the Will in case things should be added for the future.
- Executor
The person in charge of the estate is the Executor. Typically, this person is a close relative, close friend, or court appointed. The job of the Executor is to ensure all the legal work is completed when inheriting a home. For example, when the homeowner passes away, someone will need to oversee paying the bills on the property, but obviously the deceased person isn’t able to write the checks every month. The Executor is the person who takes the place and makes the decisions.
- Debt Priorities
Unfortunately, once a person passes away, their bills still accrue. For example, my grandmother passed away while living at a nursing home.
After her death, the nursing home sent the monthly bill charging by the day of when the room was occupied. Even though Grandma passed away on a Monday, the bill still reflected charges to the next day since her possessions still occupied the room. Another source of debt is credit cards. In case you are not sure what to do with the loved one’s accounts, debts, and/or the risk of Identity Theft, consult a staff at https://www.creditcards.com/ located in Austin, Texas. The Executor should be informed of the various debt related accounts to ensure those are paid off. Other types of debt that could hinder the timeframe of inheriting a home are tax liens to the property. In this case, any and all liens are required to be paid off at the time of the sale. This could also cut into the profit of the estate sale.
Another professional website to visit about the impact of credit cards is: https://lendedu.com/blog/how-do-credit-cards-work.
- Professional Guidance!
Many variables can affect the profit of selling a house when inheriting a home. A recommendation would be meeting with a tax professional and/or real estate attorney to discuss the potential fees. There’s Capital Gains Taxes, Estate Taxes, Property Taxes (which may be at a fixed rate for the elderly homeowner, however, will most likely fluctuate greatly when that person passes away), Inheritance Taxes…………..and the list goes on and on an on! What if an estate is valued at a certain price point, such as $1,000,000+ which could be a more complex sale. Other times properties are dilapidated which is a reason Reel Property Solutions, LLC can help! Abby Eubanks from Bankrate, Inc. shares this website: https://www.bankrate.com/investing/how-to-invest-an-inheritance/.
- Speaking of help with inheriting a home….
When a property is going through Probate, this is public record in the county courthouse. Reel Property Solutions, LLC has outsourced a professional to seek out these records, send letters to the Executor (or other persons on record), and let everyone know the real estate services offered. Please note it is best to make decisions once the “dust has settled” or when people’s emotions have calmed. Take your time- Reel Property Solutions, LLC is willing to work on your timeline!
- Fortune Builders is available for advice, guidance, answers, phone calls, emails, networking, and so MUCH MORE!
Reel Property Solutions, LLC got started with enormous assistance from Fortune Builders, the premier “school” for real estate investing! Since every situation is unique during the inheriting a home process, no answer will the be same for YOU or for your neighbor. Reaching out to Fortune Builders’s knowledgeable resources brings peace of mind for us, the real estate professional, which then in return brings peace of mind to you, the client. An email can be sent and answered within a couple hours. A post on the closed Facebook page can produce comments within minutes. Scheduling a phone call with a real estate field expert can happened within one day. If these resources can’t help, there’s many other local real estate experts that Reel Property Solutions, LLC networks with. Short answer: your situation, question, concern, thoughts, etc. will be addressed thoroughly and with confidence!
After reading this blog with the website links, know that many resources are available to you when inheriting a home. Hopefully tips were learned and be implemented to keep you feeling relieved that this process isn’t as scary as it may seem.
Feel free to contact us at info@reelpropertysolutionsllc.com or call 507-218-8788 for more information. Reel Property Solutions, LLC would be happy to talk about the property, come for a tour, and most of all make a WIN-WIN situation for all!
Our motto is “CATCH A WINNER!”