The Mortgage Brothers Show
Have You Inherited A Home? What You Need To Know Before You Can Sell or Refinance?
In this post, we’re going to be discussing what to do if you inherit a home. The calls we get about this are often a bit somber. We’re sorry for your loss and we hope this post can serve as a jumping off point to help get you through this difficult time. Upfront, we’re not attorneys, so if you have more complicated questions about taxes owed and the like you should start by giving an attorney a call. This is meant to be a brief overview. It’s not comprehensive. If you have more questions about any of what is discussed give us a call at 602-535-2171. We’d be happy to help. In the meantime, let’s go through a few different scenarios.
Scenario one: You’ve got nothing
So, you’ve got little to nothing indicating that you’ll be inheriting the property. Say your uncle passed away. Before he passed, he told you he wanted to give you the home. Everybody knew that he wanted to give you the home. If this is the case, or it’s similar to the circumstances you find yourself in, you’ll need to go through a probate process. Specific probate laws vary state to state, and the full process can take anywhere from three to six months, if not longer in some cases. During this process, they check for a whole suite of things, including if there are other interests in the property, outstanding debts, etc. There’s not much that you need to or can do during this time but wait. Once the process is complete, and the court sees that everything is squared away correctly, the property will finally be in your legal possession.
Scenario two: there is a beneficiary deed
The second scenario would be if you had a beneficiary deed, or a transfer on death deed. These need to be sorted out by the person who dies prior to their passing. These are easy to create and, if done properly, the person who inherits the property won’t need to go through a probate process, so it saves the beneficiaries time and money. What happens in these cases, is that when the owner of the property dies, the deed is automatically transferred. However, you’ll still likely need a death certificate and a driver’s license and such as proof of identity. Things can get more complicated if there are multiple beneficiaries. But, once it’s transferred, the property is yours.
Third Scenario: trust
The third scenario is if the property has been placed in a trust. When the owner of the property, who placed it in a trust, dies the property is still owned by the trust. In some ways, this simplifies things since the trust owns the home seamlessly. This also prevents the need for the probate period. If this is something you’re interested in we suggest you talk to an estate attorney, someone you trust that will be able to give you really good advice.
This is a brief overview to get you oriented with the different ways things might go when you inherit a home. For all these scenarios, and for scenarios not covered, there are various tax implications and other costs not covered in this article. We suggest speaking with an attorney who is experienced with this to help you through the full process. Again, we’re sorry if life put you in the situation where you need to consider these things. We’re sorry for your loss. We hope this helps. If you need any help navigating these difficult times, feel free to give us a call at 602-535-2171.
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Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.