What to Know When Inheriting a Property

Inheriting a Property

What to Know When Inheriting a Property

Oct 26, 2017, 3:48:22 PM Life and Styles

Typically, property and estates are handled by will lawyers. As a result of someone handling this for us, we never fully grasp how to act in this situation so when we’re faced with taking ownership of a loved one’s property, it can seem daunting. To make things a little less scary, we’ve put together this handy guide to inheriting property with ease. It addresses some of the most common questions and issues people face during this time.

How Long Do I Have to Act?

After the passing of a loved one, deciding what to do with debt, property, tax and money is often the last thing on your mind. The fact of it is that property doesn’t have to be dealt with straight away as typically banks and lenders are considerate of the events you’re dealing with. Inheritance tax doesn’t have to be paid for up to a year and mortgages offer a grace period whilst you get the affairs in order. Often, it isn’t until the will is executed and you take full ownership, there is no one to collect from so it’s in lenders best interests to align with yours at this stage as it offers the best outcome for everyone.

Long Term Options?

At this point you can either sell, rent or move in. Each decision will depend on your situation by they all will need to take different factors into consideration – often the deciding factor is whether a property still has a mortgage. Renting out the property may create additional income for the landlord, or create an income to continue paying the mortgage. Selling provides an immediate lump sum, and is therefore a common choice when the estate is being divided between people. Looking into the conveyancing process it allows people to see what they should expect price wise to make a judgement on what the divisions may be.

Who Makes the Decisions Regarding the Property?

A will names an executor as the main person who oversees the distribution or selling of the property – this could either be a child, friend, sibling, family member or solicitor. This person will then be in charge of ensuring tax payments, debt clearance and distributing the estate to the selected members in the will. If there is no will, or a living spouse or civil partner, the entitlement falls to children of the recently deceased.

If There’s an Outstanding Mortgage, Will I Have to Pay It?

If life insurance doesn’t cover the mortgage on the property, the mortgage will then pass on to whoever inherits the property. In the case, you do inherit a mortgaged estate but you plan to rent it out or even live it in, you will need to continue to make mortgage payments once registered in your name. Alternatively, you can sell the building to make funds to pay off the mortgage – the remaining amount will then be shared between the state will beneficiaries.

Actions If There’s No Will

If your loved one passes away unexpectedly and does not have a will in place, you will need to file for a grant of representation to gain the ability to take control of their bank accounts – also known as probate. This process allows you to access their funds to pay for funeral arrangements, other outgoings and to control assets that can be sold on or shared out.

Actions If the Property Has Tenants

Your first port of call should be to make a decision on whether you would like them to remain as tenants or if you have other plans for the place. If you want to free up the property, check the terms of their contract and draw up a new/amend the existing one depending on what you want to do.

Published by Arina Smith

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