Death isn’t easy to deal with. Despite our extensive knowledge, we can never find a way to fully prepare for it. During the grief process, we often find ourselves forced to address issues we never wanted to.
One issue that often comes up is inheritances. When you have a recently deceased family member, they may leave any belongings to be distributed amongst the will. This can sometimes include a house or land.
Due to your emotional state, you might not have given much thought to what happens when you’re inheriting a house. This guide will help you so read on.
Types of Inheritance
There are four major types of inheritance. This includes joint tenancy, Per Stirpes, tenancy by entirety, and tenancy in common.
Joint tenancy allows two or more people to own property and upon one’s death, ownership passes to the surviving owners. Per Stirpes passes ownership to the heirs of the deceased, while tenancy by entirety goes to a surviving spouse or civil union partner. Finally, tenancy in common passes the house to any individual of the deceased’s choosing.
Each type of inheritance has different regulations and requirements necessary for the process. So it’s important to consult a lawyer and tax advisor to properly understand all the legal implications.
Tax Implications for House Inheritance
Where you inherit a house, there are concerns with a variety of tax implications you have to face. Depending on the value of the house, you may need to pay estate taxes. The tax rate on the inheritance may be higher if the house is valued at more than allowed as an estate exemption for your state.
In some cases, income taxes may also apply to capital gains due to the sale of the house or investments that come with the inheritance. Understanding the tax implications for inheriting a house is important. This you help you make an informed decision about what to do with the inheritance.
Assessing the Condition of the House
You need to assess the condition of your home inheritance. This is because it is ultimately up to you to handle any potential repairs or renovations.
Start by walking around the outside of the property. Then inspect any major issues with the roof, siding, windows, and doors.
Inside, check for any electrical or plumbing problems. If you have the means, hire a certified home inspector to look for any unseen issues. Be proactive and don’t wait for a problem to arise before fixing it.
Developing an Estate Plan to Protect Your Inheritance
House inheriting comes with new responsibilities. If you do not currently have an estate plan, you need to understand how to develop one.
An estate plan is a blueprint for how your assets will be distributed after you die. With an estate plan in place, you can ensure that your intentions for the future of the house are official. This may include deciding if the house will be on the market, remodeled, rented, or left to heirs.
Inheriting a House Is Not a Walk in the Park
Inheriting a house can be both a blessing and a burden. So be sure to know all the necessary information before you decide how to handle the inheritance.
Research your options and understand the local market before jumping into any decisions. If you need to, reach out to a real estate professional for sound advice to make the best decision for your house inheritance.
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