Real estate can make estate execution more complex.
Executing an estate is no small task. Just ask anyone who has done it.
It will take time and energy, even if the estate is rather simple or relatively straightforward.
Some things can make the settling of an estate more difficult.
According to a recent Greater Baton Rouge Business Report article titled “So you inherited a house … now what?,” this includes leaving a house as an inheritance.
What are common issues?
The first is the safety of the home.
Who will keep it from being vandalized or burglarised?
Is there a security company contracted to monitor the house?
If so, the executor will need to know the password.
Who has keys to the home?
You should get the locks changed without delay, so individuals do not help themselves to assets and heirlooms!
If there are valuable items in the home, they should be removed as soon as possible.
You may have heard the "possession is 9/10ths of the law"?
Nope, it is actually more like 10/10ths.
Another issue involves what to do with the home itself.
Siblings may have varying ideas regarding the fate of the home place.
This makes communication key.
The executor must remain objective and make the best choice for the estate.
Often this means selling the home and distributing the cash to the beneficiaries.
Why?
Maintaining a home and insurance can be expensive.
To keep arguments from breaking out and dividing your loved ones, you can provide instructions in your estate plan.
What if the home is a beloved vacation home?
Your heirs may want to keep this home.
It will still need to be managed by someone.
A good option is create a limited liability company (LLC).
All heirs should help pay for its upkeep and rules should be drafted as to scenarios such as repairs and renting the property.
If the decision is to sell the home, you will want to do it as close to the tmie of death as possible.
Why?
This will save you in paying taxes on any appreciation from the time of death forward.
You will need to use a qualified real estate appraiser to value the property when fixing the date of death basis and calculating capital gains taxes upon sale.
Discuss these options with your estate planning attorney.
He or she will be able to create a plan for your specific circumstances and help you navigate those potentially hazardous family issues.
Reference: Greater Baton Rouge Business Report (November 13, 2018) “So you inherited a house … now what? Here’s some advice
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