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Inheriting a home can be a confusing process. There is a lot going on at that time and this information is intended to help direct you in what you can do with the property. It is entirely possible for this process to be overwhelming and with everything else in your life that may be working against you, these steps should help you deal with an inherited property.
First and foremost, you just inherited the property and you’re probably wondering what you can and should do next. Well, it’s very important to know who’s name is currently on the title. Next, you should probably locate a Probate attorney. They will help you get the property into your name at which time you can decide if you want to sell the property. After the property is in your name, you should look for a buyer. You can see if there’s any interest from Real Estate Investors (like us) or you can locate an agent who would be willing to sell the home on your behalf. Once you have an offer that meets your needs, sign the agreement and start the closing process. Last and certainly not least get paid for the property. Georgia is an attorney state, which means you and your buyer will need to close at a licensed closing attorney. It’s recommended to use a Probate attorney who’s also a licensed Closing attorney so you don’t have to work with multiple people.
Probate is the term used for the legal process that occurs after a person’s death. If there is an existing will, it will name an Executor over the will and it is their responsibility to gather assets named in the will. Generally, this is the easiest and simplest way and most Probate attorneys will follow this document. Should there not be a will however, there would need to be an administrator appointed over the estate. This is known as an “intestate estate” and would need to follow Georgia Probate laws. If the estate is an intestate estate and all living heirs agree on the distribution of assets, then a declaration for “Petition for Order Declaring No Administration is Necessary” can be filed and no probate would be needed.
Under Georgia’s intestate laws, the spouse would inherit the property if there are no living children or grandchildren. If there is a surviving spouse and children then they all share the estate equally. The spouse does however inherit a minimum of 1/3rd of the value regardless of the amount of surviving children. In the event there is no surviving spouse, children, or grandchildren, then any surviving parents would inherit the property. If there are no parents, spouse, children, or grandchildren, then the estate falls to surviving siblings, nieces/nephews, grandparents, aunts/uncles, or cousins in that order specifically.
A common question that is asked, is how long can this process take? The answer, most commonly, is 6 months to a year. It is entirely possible that this process can even take several years. There are too many factors in play for a generalized timeline to be established. One thing that will help simplify the process and help it move along quicker is to establish a Last Will and Testament. Communication and cooperation between heirs will also help.
It is possible for you to sell the property prior to the probate process being completed. However, this is not always possible. Normally, you have to complete the process before you can legally sell the property. When you attempt to sell the property, the Closing attorney will “pull title”. The title will clearly state who owns the property and if you do not have your name on the deed you will need to provide proof that you have legal authority to sell the property. There are a few ways around this though. One of them being “right of survivorship” which allows you to automatically own the property. An established living trust would also allow you to circumvent the probate process. Additionally, if all heirs agree on how the estate should be distributed you can file for a “Petition for Order Declaring No Administration is Necessary”. It’s always a good decision to discuss your options and steps forward with an experienced probate attorney.
Often, when a property is passed down, there are multiple heirs to the estate. Even more often still, there are disputes that arise when there are multiple heirs who disagree on how the estate should be distributed. The more everyone involved agrees the quicker the process can be completed. It is often best to have a neutral party involved, like a probate attorney or experienced investor, who can help mediate between all surviving heirs. When there are multiple parties involved you can proceed with a few options available to you. Firstly, you can “Buyout” the property, in which you own the property by yourself and pay off the other heirs to sell their shares in the estate to you. You can “Rent” the property and split the proceeds amongst the heirs as required. Lastly you can “Sell” the property and then again split proceeds between surviving heirs. Should you choose to sell, the Executor or Administrator would prepare the house for sale upon the traditional market. Using the traditional market generally offers the most reward but also requires the most effort. You can generally sell the property for the best price but you would need to deal with the process of showing the house, realtors, repairs, etc. Another option you have, is to sell to a Real Estate Investor. Generally, this involves a cash sale and quick closing. If the property has liens, outstanding mortgages, needs repairs, or other issues, then selling to an experienced investor is an easier option.
Luckily Georgia is one of the states that has no Estate tax or Inheritance tax. The best part of this is that it means more money to you in the end. It is possible that the value may fall under the Federal Estate tax, however should the property be valued under $11.18MM then this would not apply to you. Capital gains taxes do apply however. Normally, Capital gains tax is determined based on the difference between the price the property is purchased for and the price the property is sold for. However, if the property is inherited, you’re taxed on the difference between the value of the property at the time it was inherited and the price for which you sold it for. You can actually take that one step further, if you sell the property you inherited for less than its value you can write off the loss on your taxes, up to $3000.
Something else to consider is the condition of the property. Has it been sitting in disrepair for some time? Has the property been vacant? It’s always a good idea to enlist the assistance of a qualified Inspector. They will help you determine the current state of the property and if there are any necessary repairs. This can encompass anything from roof to foundations, electrical or plumbing problems, heating or cooling, pest problems, etc. With any renovation or repairs, its best to determine costs and labor, and then add an additional 20% due to hidden costs. Many times a property will have hidden repairs that are not noticed until you begin to repair something else. If the cost is too high or the thought of a Renovation is too much for you to handle, you can always turn to an experienced Real Estate Investor. We often purchase a home as-is, offer cash purchases, and are willing to take on the challenge of dealing with the property and repairs.
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