Inheriting your parents’ home can be an emotional and financial responsibility. As an adult child faced with this situation, you want to ensure a smooth and successful sale of the property while avoiding potential pitfalls along the way. In this article, we will outline the essential steps you need to take, share real-life cases from Attorney April Townsend to illustrate potential challenges, and provide valuable advice to navigate the process successfully.
1. Communicating with Siblings
Before taking any action, it’s crucial to have open and honest communication with your siblings. Everyone might not be on the same page regarding the sale of the house, and conflicts can arise. Discuss each person’s expectations, concerns, and financial needs related to the property. Finding common ground will help facilitate a more harmonious and united approach throughout the process.
2. Hiring the Right Professionals
To ensure a smooth transition and avoid potential legal and financial complications, it’s essential to hire the right professionals. One of the key experts you may need is an appraiser who can give you a stepped-up basis to ensure the home is inherited at fair market value at the date of death. This is crucial for calculating capital gains taxes later on.
3. Assessing Outstanding Issues
Unknown issues can unexpectedly arise with the property, leading to delays and added expenses. April Townsend shares a case where a house was left to the decedent’s children, but a life estate was provided for her partner. As years passed before the property could be sold, the capital gains tax significantly increased due to the property’s value growth. It is vital to identify and address such issues early on to avoid financial setbacks.
4. Dealing with an Empty Home
If the inherited home is left vacant, insurance companies may not cover it, leaving the property vulnerable to potential risks. Townsend’s experience with an estate where all heirs lived out of state and squatters occupied the property highlights the importance of securing the home to protect its value. Regular maintenance and security measures are crucial to safeguarding the property during the sales process.
5. Preparing the Home for Sale
Getting the house ready for the market can significantly impact its sale price and appeal to potential buyers. Before listing the property, assess its condition and determine if any renovations or staging are worth the investment. In one of Townsend’s cases, the executor discovered that the parents’ home was not up to code for a public sale. However, one of the children expressed interest in purchasing the home privately, saving the executor from costly updates to meet code requirements.
Selling your parents’ house can be an intricate process, but with careful planning and professional guidance, you can navigate the challenges successfully. Prioritize open communication with siblings, hire qualified experts, address outstanding issues promptly, secure the property, and assess its readiness for the market. By following these steps and learning from real-life cases, you can achieve a smooth and profitable sale of your inherited home, turning a potentially complex situation into a rewarding opportunity.