Inheriting a Home? Read This First.

Now more than ever, an inherited home is a valuable gift. Yet when the inheritance time comes, you might not be sure what to think or do. Or you might simply have questions. Thinking ahead can help get you through that time with confidence.

Here‘s a brief guide to planning ahead.

If You Inherit the Home From a Solo Deed Holder

Was the deed to the home vested in the late owner’s name alone? By default the property goes into probate. There are alternatives, though. For example, a small estates affidavit is a simpler process, and it might apply. Check the county probate court website for information.

Either way, the county will oversee the paying off of debts and the distribution of a deceased owner’s remaining property to the heirs.

Your role will involve showing the court that the late owner bequeathed the home to you. The probate court will examine the will and determine that you are eligible to inherit it.

People often think of probate as a nuisance to be avoided. But if you inherit through the probate procedure, you’ll get a new deed from the court.

Once the estate’s debts are resolved, the probate court clears the personal representative to convey the title to you. The new deed will document that the late owner has passed. It will state the date of the last will and the late owner’s death, and identify you as beneficiary and new property owner. The deed will specify the county where the home exists and provide the home’s legal description.

The personal representative will sign the new deed with a notary. Then you’ll record it with the county. And there you have it. The deed is done—naming you as the owner.

Just be aware that the personal representative’s deed to you carries no warranty of a clear title history before probate. The best way to avoid risk? Pay for a basic survey and title insurance policy.

When skipping probate (deliberately or not), a muniment of title might preserve an heir’s rights. Learn more with Deeds.com.

If Your Situation Does Not Require Probate

State laws on inheriting outside of probate vary. It is best to speak to a lawyer who works on estates and inheritances where the home is.

Here are some things to expect.

If you jointly co-owned the property with the owner you’ll inherit from (for example, if your existing deed says “joint tenants with right of survivorship”), then you legally own the property after your co-owner’s death. So, you can just do nothing? Yes. But for surviving co-owners, the best practice is to remove the deceased owner’s name from the title. Formally record the transfer of the property interest to yourself by recording an affidavit of survivorship with the county. The recorder’s office will take the deceased person’s name off the home’s title. 

If you were named to receive the home through a life estate or lady bird deed, a transfer on death deed, or a valid community property agreement, then you just need to file a survivorship affidavit with your county.

Your state’s law requires particular filings. Your county office can let you know what these are. They can include a copy of the former owner’s death certificate, a lack of probate affidavit, and updated property tax filings.

Note: Unlike probate, a lack of probate affidavit does not remove the late owner from the title.

In some states, homeowners can pass their homes along with a transfer on death deed, a.k.a. beneficiary deed. If you receive a home with such a document, you automatically own the home when the homeowner dies. The document, together with a copy of the death certificate, becomes proof that you hold the title.

Special Situations: Co-Owners, Associations

What if the late deed holder was one of two or more tenants in common? Then you are inheriting a percentage of the property. The percentage held by the deceased person is stated on the existing deed. You need to decide, with the other tenant(s) in common who now co-own property with you, how to either share the home, or purchase the other’s share. But first, the ownership interest goes into probate so the deed can be formally changed into the new set of co-owners’ names.

What if the home was part of a homeowner association (HOA)? This is very common today. Any monthly dues that have lapsed should be paid by the estate, assuming the property goes into probate. Be sure there are no HOA liens left on the title. You’re now a member of the association. You must take care of any financial responsibilities that the HOA imposes, including future HOA dues. This is the case whether or not you decide to move into the house or unit.

Your alternatives? Sell the home. Or rent it out (if allowed by the HOA) and cover the dues with your rental income. Or simply refuse the inheritance.

Safety Pointers for the New Owner

Yes, you’ll want a new deed. This involves recording proof of the late deed holder’s death, and the creation and recording of a new deed. An attorney is not legally necessary. Yet having an attorney review legal documents is recommended, to avoid potential complications later on.

Your deed will state your full legal name and address, and identify the deceased owner. It will include a full legal description of the property. If you’re one of multiple co-inheritors, each person must be named on the deed as an owner.

Having a new deed in your name will inform title agents, local tax assessors, and mortgage lenders that you now own the property without the former owner. This matters because it clarifies your right to sell or finance the home. Being named as the current deed holder is also important because it allows for certain opportunities, like eligibility to request government-issued disaster relief funds.

Recording is important not just for financial purposes, but for safety’s sake. Shady actors can try to lay claim to the deed if it’s still in the county records under a deceased owner’s name. Additional safety measures:

• Clean up the property if no one is living there at the moment. Don’t advertise that the place is empty!

• Notify the township where to send the tax bills, so you don’t incur a property tax lien. (Property tax is separate from the transfer tax you pay for the deed transfer.)

Note that once the deed’s in your name, it’s your role to pay the property taxes and maintain a homeowner’s insurance policy on the home.

Will You Keep the Home, or Sell It?

Many heirs sell the homes they receive from loved ones. That’s a perfectly valid choice. If you opt to sell, it’s helpful to hire an agent with a track record of sales in the area.

Finally, if you opt to keep your inheritance, update your own estate planning documents to include your newly acquired home.