While no one can turn down the chance of legitimately getting a property, inheriting one often comes with a lot of complexities and sometimes unease that require careful handling. In the first place, property inheritance often comes with losing a loved one – parent or spouse- and that can be devastating on its own.
When you inherit a house, you receive more than property or financial gain. Inheriting a home also brings on increased legal and financial responsibilities. It may require negotiation with siblings or other heirs, and dealing with ownership transfer and other legal issues.
For the most part, making a decision about what to do with the property is often the first question on your mind. However, before you decide what to do with it, there are steps that must first be taken.
1. Talk to the executor
The executor is a key figure for the process. The process of transfer cannot be done without the active involvement of the executor. Ask them for information and coordinate with them to get what you need. Find out who your co-inheritors are if there are any. That is, establish if you have sole ownership of if you inherited the house along with others and who they are as well as what extent of share that they have in the property.
Perhaps you’re one of several children or grandchildren inheriting the house. If you are the sole inheritor of the property, then that eradicates many complications that might arise with property change of ownership.
If you are the sole inheritor, the next thing is to take steps to legally take ownership of the property. This can be done by changing the deed of the house you just inherited so that you can truly call it your own. Being on the deed of a house means that you are the legal and rightful owner. A house deed is a legal document that is used to transfer the ownership of real property from one person to another.
We will deal with how to change the ownership of an inherited house in the next newsletter.
However, if there are other inheritors, you might need to take the next step.
2. Talk with any co-inheritors
If you aren’t the sole heir for the house, talk with your co-inheritors. See what their dispositions are toward selling or keeping the property. The situation can be complicated if several of you want to keep or live in the house, and others want to sell and split the proceeds. In extreme cases, you may want to look into inheritance dispute resolution.
You won’t be able to sell the property unless the other heirs agree, and someone will need to maintain the house until a decision is made. In that case, you may agree with the co-inheritors to put funds together to maintain the house in the short run and this might include paying land use charges that might be on the property and other liabilities, until a resolution is reached about what to do with the property.
3. Decide the value of the property: The next step that you might have to take is to get an appraisal of the property. If the executor didn’t order one, consider getting an appraisal to determine the value of the property. Knowing the cash value of the property can strongly influence your decision to keep or sell the home.
You may decide a low value property in need of serious maintenance isn’t worth the investment. On the other hand, a house that’s in good shape might serve as a nice vacation or rental property.
4. Evaluate debts owed: Ensure that a thorough search is done on any liens that claim the property as collateral. Also, determine how much is owned as taxes to government on the property. In Nigeria, government collects annual tax known as Land Use Charge on properties. Determine how much of the charges is being owned, if any, and how ready you are to keep paying this charge.
If the house still has debts against it or a tax lien, find out how much is owed and what the payments are. Evaluate the property’s total debts compared to its financial value and any emotional value it may have for you and your family.
5. Finally, Get professional advice
Professionals can help clear complications and confirm any debt associated with the house, the taxes you’ll owe as the inheritor and how selling or renting out the home will impact your finances. You can consider lawyers (preferably with estate planning and real estate expertise), estate planners, accountants, financial advisors, trust officers and/or philanthropic consultants.
You may need to rely more heavily on an accountant to evaluate the tax situation; an attorney to explain your legal options with regard to ownership and buying out other heirs; or a financial advisor to discuss how best to maximize your new asset.
If you elect to hire more than one professional, make sure they are in contact with each other. This can make your life easier.
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