Maybe your elderly parent has passed away — or maybe a friend left you their home in their will. Whatever the circumstances, you now have a house on your hands.
Now what do you do? Inheriting a home is a pretty big deal, and you should consider your options carefully. Here are some things to remember:
- Inheriting the home doesn’t mean you inherited the home’s contents. Much or all of the house’s contents may belong to other heirs. Before you dispose of any of the home’s contents, make sure that you know what your rights are to that part of the estate.
- Capital gains taxes can be an issue. If you choose not to live in the home at all, you may eventually have to pay taxes on whatever the home’s accrued value is between the time you inherit it and the time that you sell it. It may be wise to have the home appraised even before you decide how you want to proceed.
- You may have a mortgage to manage. If the home is paid off, that’s easy enough. If there’s still a mortgage on the property, however, you can encounter all kinds of different situations. You need to know if the mortgage has a due-on-sale clause that goes into effect with the transfer, if the home’s underwater, needs to be refinanced or something else.
- You may have to contend with other stakeholders. If you inherited the home with other people, you need to find out what your rights are under the deed. That will help you understand your legal options and can make it easier to decide if you want to move in, rent the home or sell your share.
Inheriting a piece of real estate can open up some complex issues. Make sure that you have experienced legal advice as you move forward to avoid complications.
