Inheriting your estate: What’s next?
When we inherit an estate, we are faced with many difficult tasks that can catch many individuals unaware. From dealing with inheritance taxes to managing outstanding mortgages, inheriting a property can be a troublesome affair.
We have already seen many news stories that indicate that millennials are set for an inheritance boom. And whilst this probably won’t occur until many people are in their later years, it still raises many questions.
So here is a look at some of the main issues that must be overcome if you find yourself suddenly inheriting an estate.
Deciding whether to stay or sell
Many people who inherit a home from a parent would prefer not to sell the property. This is entirely understandable as selling a family home is a complex and emotional matter.
However, there are those who are also keen to sell the property as quickly as possible, and with the bare minimum of stress.
Whilst going with a traditional estate agent can often lead to a slightly higher market value, this guide to selling inherited property from GoodMove shows that a property buying company can complete a sale in matter of days, rather than months.
Where do you stand with inheritance tax?
Regardless of whether you stay or sell, you’ll have to deal with inheritance tax. This means that if the property is worth more than £325,000 at the time of death, then a standard inheritance tax rate of 40% will have to be paid.
Whilst there are various ways to try and get around inheritance tax, it’s not something that can be done after the event. So be sure to check with your solicitor to see how things like inheritance tax, capital gains tax, and even your income tax could be swiftly dealt with.
Check outstanding mortgages
Regardless of whether the property is a small apartment or a luxury prefabricated home, you will have to check to see whether the mortgage has been completely paid up.
Mortgages are sometimes covered by a life assurance policy that can help to deal with this issue. But if this doesn’t apply to your inherited property, you will need to obtain a grant of representation that enables you to deal with the assets in the estate.
This probate can take anything up to 14 weeks to conclude, and it’s common to find that the mortgage debt will be paid out of the sale of the property. Thankfully, mortgage interest and payments will sometimes be frozen until this process is underway.
Regardless of what you choose to do with the property, you are likely to have to deal with some complex legal issues that will require a solicitor.
Be prepared for some legal fees that are necessary for receiving and processing probates, and these must be paid before individuals can fully receive the property or assets.
And even if all of this information is a little overwhelming, then don’t forget that there is a dedicated government probate and inheritance tax helpline that can guide you through the process.