Losing a loved one is difficult. Often families must make decisions, from funeral or memorial arrangements to how to manage their loved one’s belongings while grieving the loss of that loved one. The financial decisions that come with inheriting property can be challenging and confusing. When you are in this unfortunate situation it is common to have a lot of questions about what to do next and how to manage all of the intricacies of this process. It helps to have a trusted professional to guide you through.
Start by locating the deceased persons will outlining their wishes for their estate. An estate is comprised of all assets left behind after death. The will is the legal document that states how the assets or estate are to be distributed to heirs. Heirs are individuals or a group of individuals who can legally inherit according to the will or by law. In Oklahoma, the will must be filed with the county court in the county where the deceased person lived at the time of their death within 30 days. This allows the court to validate the will and to ensure the wishes of the decedent are carried out. Failing to do so can result in jail time. If there is no will, the state’s laws regarding intestate succession come into play. Even if there are no assets you still need to file the will with the court.
Probate is the legal method of settling an estate. During the probate process the court and/or executor of the estate take control of the deceased owner's assets, assess their value, pay creditors, and distribute the assets to the person's heirs. The court ensures that the will is valid and oversees the distribution of the estate according to the requirements of the will. If you are involved with a decedent’s estate, you should understand the basics of probate for Oklahoma and should consult a probate attorney to guide you through this process. Probating the property also provides a method to transfer title to the property to the intended heirs and maintain a clear chain of title to the property.
The executor is the person legally allowed or stated in the will to manage, secure, or gather the estate’s assets. The executor’s main duty is to carry out the instructions and wishes of the deceased. If there is not an executor named, the court will appoint one. The executor is responsible for determining the validity of all claims against the estate. There may be outstanding debts, tax obligations or judgments to be settled. This includes existing mortgages that may need to be paid. A short sale could be an option if there are mortgage payments due which they are unwilling or unable to pay. Otherwise, the estate could face foreclosure. If the heirs do not want the inherited property, they should consult a lawyer promptly, as disclaimer paperwork will have to be filed.
There are different options to consider when it comes to existing mortgages. If the mortgage has a due-on-sale clause it may be necessary to either pay off the mortgage in full or sell the property. If there is a reverse mortgage, there may be a limited time to repay the amount due — usually six months. Should the property be underwater (meaning more money is owed than the property is worth),the bank may agree to a short sale on the home, which means they will accept less for the property than the remaining loan amount. If there are not enough assets to cover these debts, the estate is insolvent. State laws differ about how to distribute property in an insolvent estate. You may need a dependable real estate agent and tax attorney or Certified Public Accountant (CPA) to help you through these obstacles. Whether there is a mortgage payment or not, the owner will be on the hook for maintenance, HOA fees and the other unexpected expenses that come with homeownership.
Although inheritors or beneficiaries are not legally responsible for debts incurred by their parent or relative, the inherited assets or estate must cover all remaining debts. After all debts are paid the inheritance can then be passed on to the heirs.
The transfer of real property can be complicated if there are multiple heirs. If one of the heirs is interested in keeping the property while the others want to sell it, the interested heir can buy out the others using conventional financing. Keeping the property comes with obligations such as property insurance, utility bills, household expenses and grounds maintenance. If the heirs cannot agree on how to handle the property, they can end up in a lengthy court process. Whether there is a single heir or multiple heirs to the property, selling it quickly will save money, time, and stress.
All heirs must keep in mind that the heirs must be able to pay the estate taxes and annual property tax payments, as well as the mortgage payments. Although inheriting a home does not make the heir responsible for additional taxes in most states, they are responsible for yearly property taxes. Estate taxes are levied on the entire estate before it is distributed to individuals and is imposed on the value of the property at death. In addition to estate taxes, the heir may be required to pay capital gains tax on the difference between the net profit from the sale. Selling the property as soon as you inherit could help save money from the capital gains tax.
If there are existing occupants living in the estate the remaining heirs need to come to an agreement whether the individual will continue to live there or will need to vacate. If selling the property, tenants must vacate the property in time to facilitate the sale. If the heirs are keeping the property with tenants living on the property, heirs must fulfill the responsibilities of a property owner. If the property is sold, the legal rights of those tenants must be given consideration. For complicated situations like this, consult areal estate attorney.
If you are considering selling that home, we want to offer professional support and guidance to make sure you get the most money possible for your loved one’s investment.
Here is how we can help you through the process:
- We know several good estate sales companies .If you need their names, please contact us.
- We will refer to you a list of trusted contractors, electricians, plumbers, or other professionals to fix and/or maintain the house.
- If you need help selling the home, we can offer you lots of helpful tips that will help you through the process.
- To know what the home is worth we can put together a FREE Comparable Market Analysis and send it to you. That will help you determine what the home is worth and the best way to sell it.
- Should you have any questions or need any help, please let us know. We specialize in selling inherited homes and can help you through the process.
Please accept our sincerest condolences for the passing of your loved one. We wish you and your family peace during this challenging time.
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Havenly Real Estate Group