When people create estate plans, establishing a plan for what happens to their homes if they pass away is essential. Many choose to let a loved one inherit the property and give them the full freedom they need to decide what to do with the home once ownership transfers to them. If you’ve recently inherited a home, you’ll need to figure out what to do with the property, and the path you choose can impact your personal estate plan. Here are a few things to do as soon as you find out that you’re inheriting a property from a loved one.
Decide What You Want to Do With It
Unless your loved one left clear instructions of what to do with the property, it’s up to you to decide what you want to do with the home. You’re free to choose whatever you see fit, but many homeowners choose one of the following options.
You Can Sell It
If you already have a home you love, you can always sell the home you inherit. If the home is in good condition and the mortgage has been paid off in full, you may be able to keep the proceeds. Doing so could give you access to cash that you can use to pay down your current mortgage, build your savings, plan a college fund for your kids, or anything else you feel is necessary.
But if the home is in disrepair or has a mortgage or second mortgage in place, you’ll need to take care of the repairs and pay off those loans before you can take any of the proceeds of the sale. Keep in mind that there may be tax impacts if you decide to sell. Speak with a tax professional to learn how selling a home you inherit may impact your tax liability.
You Can Rent It
If you don’t want to sell the home, you may be able to rent the property out and take on the responsibility of becoming a landlord. This can give you access to additional income each month, but it’s not something you should do without considering the ramifications.
As a landlord, you’re responsible for maintenance and upkeep of the home, finding tenants, collecting rent, and other similar tasks. If you don’t have the time or desire to take on additional work, you may be better off selling the property. If you do decide to become a landlord, consider factoring the rental property into your estate plan so your tenants will be looked after if something happens to you.
You Can Move In
If you love the property, you may be able to move into the home you inherit. This is an especially good option if you’re currently renting or are considering selling your current home. Just be sure to add the home you inherit to your estate plan once you decide to move in.
Make Sure to Update Your Estate Plan Once You Decide
No matter what you decide to do with the property you inherit, you’ll want to update your estate plan to reflect that decision. Selling the property will give you access to cash that you’ll likely want to leave to someone you care about. And keeping the property means you’ll want to include it in your list of assets. Your Illinois estate planning attorney can help you make those updates as needed. And if you end up selling the home at a later date, they’ll be able to update your plan to reflect that change as well.
Don’t Have an Estate Plan? Let Legacy & Life Help
If you’ve inherited a home but don’t have an estate plan, now is the perfect time to create one. Just make sure you’re working with an experienced Illinois estate planning attorney. At Legacy & Life Law Firm, our team is here to help. Schedule a free consultation today.