Frequently Asked Questions About Inheriting a Property

Many questions come up when inheriting a property. That’s why Patriot Title Agency in Columbus, OH, put together this post to answer the most frequently asked ones and help you through the process. 

What Is an Inheritance?

Inheritance is a legal and financial term that means to pass along assets from one to another when one passes away. There are many forms of inheritance; some might be cash, others could be investments, while others might be valuables like real estate, art, and automobiles. Usually, people have many questions after they receive an inheritance; in this post, we’ll do our best to answer the most common ones.

After inheriting a property, it’s essential to get guidance from professionals to decide your best course of action. Call Patriot Title Agency, Inc. at 330-479-3000 for information on title services and title insurance.

Do I Need to Pay Taxes on an Inheritance?

Depending on the property location, you might need to pay different taxes as a new property owner. Here are some of the most common ones:

• Estate taxes: Transferring an estate from one person to another; some states and the federal government charge these taxes. The amount of estate taxes you need to pay in Ohio varies depending on the property's value. Federally, as of 2022, these taxes only apply if the estate’s combined assets were more than 12.5 million dollars.
• Capital gains taxes: This tax only applies if you decide to sell your inherited property. As capital gains taxes take into account the market value, they only apply if you profit from selling the property, meaning if you sell it over market value.
• Property taxes: Lastly, property taxes are part of being a homeowner, so if you decide to keep the property (to live in or to rent), you’ll need to cover this tax. Property taxes vary depending on where the property is located, so it’s an essential piece of information to have when deciding whether you’ll keep your inherited property.

Patriot Title Agency, Inc. represents over 100 years of experience in the Title Industry and has expert agents ready to help you with all your title and escrow needs. Call today at 330-479-3000 and get all the information you need to make the right decision.

Do I Have Legal or Financial Responsibilities?

When inheriting a property, it’s essential to be aware of the legal and financial responsibilities that come with it. Let’s go over some of the essentials you should be mindful of:

• Insurance: It’s important to look into the property’s insurance as soon as possible, as having a property without homeowner’s insurance could put you at a disadvantage if something happens. Figuring out the insurance status of the house is essential as you usually have 30 days after someone passes away in which the previous policy will still be valid.
• Mortgage payments: Knowing the home’s mortgage status is also essential when inheriting property. If there are any outstanding debts, you’ll need to pay them, or you risk foreclosure. Getting a credit report for the person who passed away is the best way to figure out if they had any outstanding loans or mortgages on the house.

Is It Best to Keep or Sell the Property?

Keeping or selling the property is a big decision to make when you’ve inherited it. There are many aspects to consider, from financial to legal responsibilities. It’s vital to assess if you can cover all of them without it meaning straining your finances. Sometimes, properties and estates are inherited by more than one loved one. This means that more than one person needs to decide what to do with it. Before making any decisions, you’ll need to consider others to ensure that you honor everyone’s wishes. At this point, it’s important to be considerate and diplomatic as emotions could run high and ultimately affect the decisions around what to do with the property.

It’s Best Not to Rush

Lastly, it can be overwhelming to inherit as often you’re not only receiving a property but also grieving the loss of someone you love. Deciding what to do with the property is as much an emotional decision as a financial one; that’s why you need to take everything mentioned above into account and try to take the decision as calmly as possible.

Inheriting a property raises many questions about the process and obligations that come with it; we hope that with this post, we’ve cleared up some of them. If you have any other questions regarding title services, title insurance, or escrow, call Patriot Title Agency, Inc. at 330-479-3000 to talk to one of our agents.