Inheritance isn’t always as simple as receiving a check for a certain sum of money. Sometimes, it involves inheriting a property, and that property may come with challenges of its own.
However, when you understand how to best handle an inherited property, you can maximize its value to you. Check out some tips from an estate planning attorney.
1. Make Sure the Premises Are Secure
This step is easy to overlook. You should always secure a property you’ve recently inherited, but it’s especially important to do so if it has been unoccupied for a considerable length of time.
Unsecured homes that appear to be abandoned can attract vandals and squatters. Boarding up broken windows and ensuring doors are locked can help prevent damage while you consider your next steps.
2. Obtain a New Deed
The executor of the deceased’s estate should be able to help you with this step. However, if they cannot, you may be able to enlist the help of an estate planning attorney.
To draft a new deed establishing you as the owner of the property, you must have copies of the following:
- The deceased’s probated will
- The deceased’s death certificate
An attorney can draft a new deed for you, which should then be notarized and filed with the county court.
3. Pay Past-Due Taxes and Investigate Liens
If the deceased was behind on property taxes at the time of their death, you will need to pay these when you assume ownership of the house. Likewise, you’ll probably be on the hook for any past-due utility bills.
In some cases, you may discover the house has a lien on it. When it comes to resolving that lien, there are a few possible scenarios:
- The deceased’s estate pays the lien
- You pay the lien yourself
- You sell the property and use the proceeds to pay the lien
- You let the creditor take the property
To determine whether the property has a lien, contact your county clerk’s office.
4. Have the Property Appraised
This is seldom a requirement when you inherit a property. However, having the property appraised is a good idea for a number of reasons:
- It establishes the home’s value for tax purposes
- It helps you make sound decisions when insuring the home
- It may identify any major structural issues with the home
Establishing the home’s value for tax purposes is particularly important. When you inherit a property, its value is “stepped up” to its value on the day the deceased died. If you ultimately choose to sell the property, this can dramatically reduce any capital gains tax you owe.
5. Set Your Goal for the Property
The steps you take next will depend on the goal you choose. These are some common decisions heirs make about inherited property:
- Making it their primary residence
- Selling it
- Turning it into a rental property
- Keeping it as a vacation home
If you intend to rent or sell the property, your estate planning attorney may be able to recommend a reputable property management company or realtor.
Looking for an Estate Planning Attorney?
Whether you’re looking to create an estate plan or trying to decide how to handle an inherited property, Mason Law and Planning Group is here for you. We’ve assisted countless Colorado residents in situations like yours, and we look forward to helping you navigate the new challenges you’re facing.
Contact us to get started with a consultation!