So, You’ve Inherited A Home
If you’ve recently inherited a home, you have will have finally received something that will slightly soften the pain of your recent loss.
Homes are major assets, and inheriting one can present immense opportunities for you and your future, but what to do next?
Below is an outline of the plan that we help institute with a vast majority of our clients who find themselves in your situation.
Establish the situation.
It is entirely possible that you have not inherited this home alone. Siblings, parents, relatives or complete strangers may also be staking a claim to the home. These situations require negotiation and resolution, and can quickly descent into conflict between loved ones if not addressed properly.
So, if you believe you have inherited a home, the first step is to establish the facts. Have you inherited the home in its entirety? What did the estate of the deceased actually request? Is there a mortgage? Does someone live there still?
Tell Us Once & Council Tax
While not entirely related to the home itself, we recommend utilising the very helpful “Tell Us Once” service from the Government website. It allows you to notify all of the major government bodies of a death in one go such as the DVLA and HMRC, and, in the case of properties, the council too.
Upon notifying the Council of the death, it initiates a class of exemption to council tax from the date of death, until the date of the grant of probate, plus an additional 6 months thereafter. So, we do this as soon as possible.
Establish A Plan.
Next, we need to establish a viable maintenance and care plan. No matter your intentions with the property, whether to sell, rent, renovate or move in, these processes can take months and leaving a property alone for months on end is never a good idea.
Whether you need to give up your Saturday mornings to care for the lawn, or organise for a boiler to be replaced, you need to stay on top of upkeep while dust settles and your intentions with the property can be established.
Financial, Legal & The Other “Tasks”.
Once a homeowner has passed away, so much more than the title deeds are effected. Every insurance, any mortgage, council tax and other debts will need to be addressed or changed for the transfer to continue.
Beginning with the mortgage. Any outstanding mortgage payments must continue without hiccup, as the terms stand, and could result in foreclosure if you fail to maintain the payments. It should not be difficult to uncover whether a mortgage remains on the property, and you can of course request a credit report on the individual who passed away to get a full breakdown of their debts.
Additionally, the insurance documents may need to be updated. To do this, you or the executor of the Will needs to contact the existing insurance providers, notify them of the death and gather an understanding of what your options are moving forward, then you simply take the decision that best suits your needs and ambitions for the property.
It’s always worth checking other debts, as you may find unpaid bills or even second mortgages. These debts tend to follow the owner of the property, so they are now your responsibility.
Make Your Decision
With your decision made, and all debts, contracts and obligations fulfilled, and everything relating to the home in your name, then it’s then time to take action with your plan.
Moving in
In the case you chose to move in, there is nothing stopping you apart from your own affairs. You must consider your own financial situation and capacity to pay for the mortgage, upkeep, council tax, insurance and so on.
There are mortgages out there that allow and account for situations like this one, and these could be worth exploring.
Rent It Out
The popular letting market is always an opportunity, but only with due diligence done on it’s potential. Speak to estate agents to get a rent valuation and always do research on the competition of holiday lets in the area if that’s something which appeals to you.
Naturally, not all properties are ready to be let immediately, and you may have to undertake some repairs and spend some money before it’s ready for tenants. If you are prepared to do this, or find that the property needs no work to be ready, then rental income represents a great source of income. Get some advice on letting tax implications with our team by clicking here.
Sell It
If the market is there for it, then selling the property is always an option. Maybe it’s too much emotionally, or the practicality of your other options just aren’t there. If you were to sell it, you’d receive a clean break, and liquidate the asset.
Always be ready for the tax implications of every opportunity shown above, and consult with your advisor directly about how to fulfil the obligations.
Take Action
If you’ve taken value from this article, then you need to know there are countless more implications, situations and decision that need to be undertaken outside of the rough guide above, if you have recently inherited a home, then contact us today to get advice specific to your situation.