Have you just inherited a family home and no idea what to do next?
Inheriting a house seems like great fortune. However, it often comes burdened with complicated legal ownership dilemmas. From paperwork hassles to title difficulties and disagreeing family members, the "gift" can become a burden.
And here's the thing...
They're only going to continue growing. The largest wealth transfer ever seen is taking place currently. Much of it is tied to real estate.
Here's what to do about it.
In This Guide:
- Why Inherited Home Ownership Gets Messy
- The Most Common Legal Ownership Issues
- When Contesting a Will Makes Sense
- How To Protect Your Claim
Why Inherited Home Ownership Gets Messy
When a person dies their house doesn't automatically become yours. There is a legal process (typically probate) that determines who actually owns what. And it's in that process that things usually go wrong.
Why fights often erupt over a deceased loved one's will? Because often the family home is the largest asset in an estate. When that much money is at stake disagreements are inevitable.
Just how big is this trend? According to Cerulli Associates, $124 trillion will pass through to 2048, and a significant chunk of that will be family real estate.
When involved in a Florida home contest, you should talk to a Florida probate litigator as soon as possible. Challenging someone's will or fighting for your right to an inherited home is not something you should do by yourself. Having the proper legal help from the beginning can save you months of frustration. The sooner you seek advice, the better position you will be in.
Because here's the reality...
More money = more fights.
When property values rise, so does the motivation to contest an inheritance. Translation: more families fighting over the family home in court.
The Most Common Legal Ownership Issues
Not all inherited properties have issues. When they do however, issues generally fall into several categories.
Tangled Or Unclear Title
This is probably the most common issue of all.
"Tangled title" is real estate jargon that indicates there is no clear paper trail of ownership of the house. Often occurs when a home is informally handed down without a will.
The outcome is known as heirs' property. Multiple family members own the property together. No one has clear ownership and no one can sell, refinance, or repair the home without difficulty.
And this happens more often than you may realize. One study by the Housing Assistance Council and Fannie Mae estimated that as much as 42 percent of land in certain regions could be considered heirs' property subject to unclear titles.
Multiple Heirs, One House
What happens when three siblings inherit one house?
Chaos, usually.
If more than one person inherits property, they each own a portion of that property. But you can't divide a house into portions like you can money. Which brings up many questions:
- Who pays the taxes and upkeep?
- What if one person wants to sell and the others don't?
These disagreements are where a lot of inherited home disputes begin.
Debts And Liens On The Property
An inherited home doesn't always come clean.
Sometimes there's an existing mortgage. Other times there are unpaid taxes, contractor liens, or debts owed against the property. Prior to owning it free and clear, those are typically paid off first.
A Will That Doesn't Match Reality
Families these days are different. There are step-children, second marriages and blended families.
The issue? A will created years prior may not match up with the current family structure. Conflicts arise quickly when the document isn't what was anticipated.
When Contesting a Will Makes Sense
Occasionally it is the will that's the issue. If that's the case then contesting the will is the solution.
But let me be clear...
You cannot challenge a will if you're simply unhappy with it. Just feeling like you didn't get enough is not grounds to contest a will. You have to have legitimate grounds to contest. These are the most common:
- Undue influence: Someone pressured or manipulated the deceased into changing the will.
- Fraud or forgery: The will was faked or the signature isn't real.
- Improper execution: The will wasn't signed or witnessed correctly under state law.
Problems like these are becoming more frequent. One reason is that we're living longer. Statistics reveal that 1 in 11 people over age 65 are suffering from dementia. So issues surrounding mental capacity and undue influence are increasingly relevant.
Will contests are serious undertakings. They take time, money, and can damage family relationships. For that reason it's critical to carefully consider if you have grounds to contest.
(There's that "measure twice, cut once" idea again.)
How To Protect Your Claim
Ok, now that you know the how and why. Here are the steps you need to take to protect ownership of your inherited property.
Get The Title Checked Early
Don't wait until you have a problem. Order your title search now and find out who is listed as the owner and if there are any liens or claims against the property.
Cleaning up a muddy title can cost you a pretty penny. Pew Charitable Trusts put the average resolution cost for one in Philadelphia at $9,200, so prevention is key.
Gather Every Document You Can
Paperwork is your best friend here. Track down:
- The property deed
- Tax records
- Any trust documents
The more evidence you have, the easier it is to prove your rightful claim.
Talk To The Other Heirs
Talk to siblings who live in the home with you right away. Hash out the difficult discussion early and attempt to come to an agreement on property disposition. Many disagreements can be worked out with mediation rather than expensive litigation.
Get Professional Legal Help
Things can get messy with inherited properties quickly. A qualified probate lawyer will walk you through the process, help protect you and your interests, and assist you with the DIY prone tasks.
Final Thoughts
Inheriting a house is meant to be a positive experience. However, the legal title issues you may face are very real. In fact, they're becoming more frequent as the volume of transferring property continues to increase.
To quickly recap what matters most:
- Know the common issues, from tangled titles to shared ownership
- Understand when contesting a will is truly justified
- Gather your documents and get professional help
The best family wealth advisors when it comes to inherited property are those that move quickly. Don't let a small problem become a full blown court battle. Act now and save your inheritance.