It’s never easy to sort through financial affairs after you’ve lost a loved one. Yet the debts and assets of a parent, grandparent, or anyone else you may be tied to might end up becoming your responsibility to sort through. If one of your loved ones leaves behind a home and it’s either been willed to you or passed on to next of kin, you may suddenly find yourself asking what to do with a home that’s not your own.
If you’ve inherited a home in North Carolina, there are a few options you may want to weigh alongside a financial planner or accountant. Here are the things you should consider as you determine how you want to move forward.
Do you want to keep the home?
You may want to keep a home you’ve inherited for any number of reasons. You may have a sentimental attachment to it if you grew up there or if you spent a significant amount of time in it. You may even find it’s a better option than living in your current home. Or you may be considering using it as a rental. Keeping the home may have numerous benefits, but you’ll want to make sure to weigh them all.
If the home has a current mortgage, you’ll need to get in touch with the lender to determine who, in addition to the person who left the home to you, may still be on the mortgage. In fact, if there is still a mortgage on the home, you’ll have to determine if you have the resources to take on the extra payment or if you would rather convert it into a rental property to begin making money on the property. Becoming a landlord has its own set of challenges, so keep that in mind before you determine to take on a home as a rental. Talk to a trusted mortgage lender to see what is feasible for the circumstances.
If the home is already paid for and you’re considering keeping the home, talk to an attorney and tax accountant about the situation for clarity. While North Carolina does not have an estate tax, other states do, so you may get charged taxes for a property if you inherit it within a different state. Federal estate taxes may apply as well. You’ll also want to be aware of additional costs, including insurance, utilities, property taxes, and unpaid maintenance on the home.
Do you want to sell the home?
Selling a home can be difficult if there are several heirs involved in the inheritance. Often, siblings disagree on what should happen to the home, but there are several ways to approach a sale if you can’t see eye-to-eye. One of the first things you should do is to assess the value of the home and the land before making any decisions so everyone can get on the same page.
Start by talking to an experienced real estate agent who knows the area and can help you make the right choice for your family and the home. As an example, if the home you’ve inherited is within the city of Raleigh but hasn’t been updated in years, the land may be worth more than the home. A smart financial decision may be to sell the home for infill development. An agent who understands infill development can tell you whether this is an option for the home.
On the other hand, if a home is well maintained, or if updates are minimal, you may be able to sell the home quickly. That doesn’t mean it will be an easy process. You should always be sure to talk to your lawyer and financial planner to fully understand what it will take to sell a home you’ve inherited.
Make the best choice for your family
As you process the loss of the person who left you their home, it may be difficult to make a smart financial decision. That’s why you need the right team to help you. Be sure to talk with your family members and include your financial planner in the conversation before you decide what’s right for your needs. In short, the thing that’s right is what’s best for your family, both now and into the future.
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