Considerations About Inheriting Real Estate
The annoyances of homeownership are a popular subject of conversation at housewarming parties. The new homeowners will proudly humblebrag about all the costly repairs they made before they moved in and the ones they plan to make next. The conversation then turns to a game of one-upmanship about homeowners’ association dues and the aches and pains of lawn maintenance. The participants in these venting sessions implicitly agree that the rewards of homeownership outweigh the hassles. Everyone can agree, however, that selling a house is a pain, even when you can use the money from the sale to buy an even better one. A real hassle is when you become responsible for a house that you never bought and never intended to own. Inheriting a real estate property can be the quintessence of generation wealth, or it can be so much frustration that you wish that the relative that left you the house had just disinherited you instead. A Tampa estate planning lawyer can help you make the best decisions about the real estate property or properties in your estate plan.
Will a Paid Off House Improve the Beneficiary’s Situation as Much as Cash Equivalent to the House’s Value?
Some people would be delighted to inherit a house, while for others, an inherited house would harm their finances more than it would help. If your son and his children already live with you, then inheriting the house would be a boon to him and his side of the family. If your daughter lives in another state and has no intention of moving to Central Florida, she might still benefit from inheriting the house if she could generate income from it by renting it out to tenants on a long-term basis or as a vacation rental.
Sharing an inherited real estate property among multiple heirs is a challenge, especially if none of them want to occupy it. If you are not sure about the beneficiaries’ plans for the house, leave it to them to share, and during probate, they can jointly agree to sell it, or one heir can buy out the others’ shares. If you know that none of the heirs want to keep the house to live in or rent out, your will might order the personal representative to sell the house during probate and divide the proceeds among the heirs.
How Can You Protect Your Family Members From the Expenses Associated With Inheriting a House?
If a family member lives with you and wants to continue living in the house even after you die, it may make sense to transfer ownership of the house to him or her now instead of at the end of probate. If you go this route, do it sooner rather than later to avoid losing your Medicaid nursing home care eligibility. Upon receiving ownership of the house, the heir should take advantage of the 1014(e) step up basis to reduce the amount of capital gains tax he or she must eventually pay.
Contact David Toback With Questions About Estate Planning for Homeowners
A Central Florida estate planning lawyer can help you pass your house on to the next generation for as little hassle and expense as possible. Contact David Toback in Tampa, Florida to set up a consultation.