Inheriting residential real estate can be an immense gift and boon to your future. Even if you will not reside there and it is just an asset to sell, what a windfall it can be! That said, inheriting residential real estate also brings with it certain important responsibilities, and that goes double and triple for executors or trustees.
There are all sorts of liabilities, insurances, and special transactions that might become important when a piece of residentail real property is at stake. However, foremost at issue for heirs is selling at the right value.
Indeed, responsibility for understanding the real estate market or knowing whom to trust when selling real estate is something an heir takes on.
A possible case of failure to get the value of an inheritance right was brought to light in a recent MarketWatch article titled “This NYC home’s price rose 54% in a week.”
The New York City home in question was inherited and then privately sold. Thereafter, the buyers turned around and sold it again - and the market snapped it up at 154% of the sale price given to the heirs.
Perhaps the heirs knew what was going on. On the other hand, perhaps this was a classic case of heirs accidentally lighting up a fire sale in their haste to get rid of an asset.
While heirs themselves can lose such a windfall, woe be it to executors or trustees who do not do their due diligence and miss the mark on a profitable sale.
If you are set to inherit a property, it is essential to understand the responsibilities and myriad factors at play. No, you do not need to become a real estate expert, but it is a great idea to be fulling informed and appreciate all of the moving parts involved.
What if you are planning for your estate now in Overland Park or elsewhere? Do you know the value of the properties you might pass down and is there something that can be done either to teach your heirs or to maximize the value of the property?
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: MarketWatch (March 19, 2014) “This NYC home’s price rose 54% in a week”