Boomers stand to inherit upwards of $27 trillion over the next four decades, according to The Center of Wealth and Philanthropy at Boston College, and a portion of that includes the house their parents lived in. What do you do when you inherit a house?
When that house becomes yours, figuring out what to do with it can present financial and emotional issues. If your siblings are involved, things can get even trickier.
Our advice when inheriting a house in Simi Valley area:
- Take a breath. Nothing has to be done immediately. You and siblings will have a lot of different emotions and memories about the home. Think about what the home means to each of you. Some may want to sell and split the proceeds immediately. Others may think about living in the house again. Everyone will want to know what the house is worth.
- Seek the advice of professionals. A real estate agent or real estate investor experienced in your neighborhood is a must. The professional can walk through the house, see if work needs to be done to sell it and will give you a feel for the neighborhood and the house’s worth. The other professional could be an attorney good in probate and real estate. You need to find out what is owed on the house, what is the cost basis, any liens outstanding. These professionals will answer any questions you have and will help you make selling decisions.
- Clean the house. As you clean, you can divvy up the folks personal belongings and arrange to sell the rest in a garage sale or estate sale. If you plan to sell, the house will present a better face to the public if it is clean and empty or staged.
- If you’re inheriting a house that hasn’t been upgraded in decades, get an inspection before making any decisions. The amount of money you may have to sink into the place just to make it insurable could determine whether you choose to sell it, rent it, or occupy it.
- Decide to sell or rent after the house is clean. There is another choice. If the house is underwater, you don’t have to accept the inheritance
- People always ask if you have taxes due on the inheritance. If there are taxes due, the estate of the deceased pays the taxes on the value of the estate. While California does not have aninheritance tax, the state does have some special tax-related issues that affect beneficiaries. Some money gifted in death may be taxed, despite the lack of a California inheritance An inheritance tax is a tax on property, cash or other assets that are bequeathed to a deceased person’s relatives, significant others or friends.
- Understand in this process, nothing can tear a family apart more than money. Be wary of arguments about renting vs selling; what price to sell the house; who gets what possessions; what is the proper sharing arrangement; what professionals to use; and how any comingled money is to be invested.
- While in probate, which is approving the will and discovering debts, if you decide to sell, you can still sell the house.
- Once distributions have been made, preserve your capital. Old money has a saying, “Never touch the principal.” They live off the income. Capital can be hard to accumulate. Even if you save 10% of your income each year, it takes considerable skill to save and invest to accumulate a large savings account. So treat it kindly. Would your parents, who passed on leaving you their wealth, feel good about the way you spend your inheritance? Consider hiring a professional investor.
Coal to Cash Homebuyers, Inc. is here to help homeowners out of any kind of distressed situation. As investors, we are in business to make a modest profit on any deal, however we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Just the simple honest truth about your home and how we can help you sell it fast to resolve any situation.
Give us a call today at 805-426-9988 to let us know what YOU need help with!