When inheriting a property, you receive a little bit more than just the financial gains or property. This activity may also bring additional financial and legal responsibilities. You may even have to negotiate and share it with other heirs and siblings, causing a rift and an emotional reckoning of a lifetime.
If you inherit a property, the first step is to create a plan to maintain it while everything settles down. However, here are three steps you must take when inheriting property.
Step #1 – Get the Legal Ownership
As you inherit a property, you must ensure that you have the ownership transferred in your name. This is a simple process if you are the sole beneficiary. Does the property you are about to inherit have multiple heirs? In that case, you must once again make sure that there is a clear mention of your name as one of the heirs with shared ownership.
The will of the deceased will be proof that you are the legal heir or beneficiary of the property. However, if you are one of the heirs, you can do the following two things.
- Sell your share of the property to another heir in return for cash
- Buy the share of property from other heirs and become the sole owner of the property
Step #2 – Documents Are Key
Once all of the legalities are taken care of, it is time to transfer the property in your name. For this, you will need to get in touch with the relevant authorities to obtain the power of attorney and other legal documents you may need later.
Step # 3 – Check for Liabilities
You have to remember that inheriting the property also means inheriting its liabilities such as insurance, mortgage, and any other debts. This means you will have to continue making monthly mortgage repayments or face foreclosure. The same rule applies to paying property insurance premiums on time.
You must run a title check on the inherited property and find out any liens and outstanding debts secured against the property. These may include personal loans, second mortgages, business loans, etc. Remember, these debts follow the property, and whoever becomes the owner also becomes liable to pay these debts off.
3 Ways to Deal with Inherited Property
After inheriting the property, you will have three options which are:
You can move into the property and make it your new home. If the mortgage on the property has been paid, you can get rid of your old mortgaged home and move into this mortgage-free house. It’s a win-win as you will get rid of your mortgage and get a new home for free.
- Rent It
If the inherited home is too small for your family and has a mortgage, you can always rent it out. This way, the home will pay for its mortgage via rent, and you may be able to get some extra money for a monthly income.
- Sell It
If you want cash rather than a property, you can always sell it at the market price.
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