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Inheriting a property is often a bittersweet time. As such, the emotional backdrop to the moving of ownership can make the choices more daunting than they perhaps need to be. Plus, property ownership is rarely a clear-cut process. From buying a new home to selling it, there’s a lot of paperwork to rifle through.
Still, when you inherit a property, you have two main choices. You can keep it and use as you wish. Or, you can sell the property. With both choices, there are a few stages to get through before you can cement your choice. Afterwards, your choice may even lead you to more paperwork – but that’s your choice.
To help with this tricky but obligatory process, here are some things to know.
Selling an inherited property
When someone passes away, their assets go into probate. This includes their house if they owned it at the time of their death. This legal process sees the courts validate the person’s will. During this stage, rights for handling assets can be handed over to named heirs. It’s at this point that the property can be put up for sale.
You may want to sell the property to get the sale money. Alternatively, you may need to sell the property to clear the deceased’s debt or outstanding taxes and expenses. Still, there are steps to get to the final sale. Either the will’s executor or a family member if there isn’t a will shall need to apply for probate.
The next steps include working out and paying inheritance tax, providing a death certificate, and perhaps dealing with a contested probate. There are UK-based operators without hidden fees that can help with selling a home in probate. Then, once probate on a property is received, you can essentially follow the usual property-selling steps.
Keeping an inherited property
There are many reasons to keep an inherited home. You might be able to upgrade from your current living situation to a better house. This could be prudent as house prices did see a dip of late. Otherwise, some pick to rent out the property or have it as a second home.
This can be the simplest option as you won’t have to deal with the sales process. Still, you’ll need to deal with the transfer of any outstanding mortgage. As well as this, inheritance tax may come into play and be a bit trickier to navigate. Even if you don’t end up living in the property, you’ll be responsible for mortgage payments.
Those who sell inherited properties have the benefit of using the sale price to pay off outstanding loans. Those who keep inherited properties either need to pay off inheritance tax and outstanding loans via their own funds or put their name to them.
Inheritance tax varies in thresholds and bands, but need considering before deciding to keep a property. Sometimes, though, upgrading your house to an inherited property or selling off other assets can ease the tax burden enough.
Inheriting a property can create a complicated situation. Luckily, the choice of what to do remains yours and professionals are always at hand to help.
Image Credit: depositphotos.com
