One of the immediate concerns facing you, as heirs to the property, will be how much it is really worth. For a cabin on a lake that could have been built in the 1950s or ’60s (or even older,) it may not be easy to assess its value simply by looking at it today, particularly if there are no recent comparable sales available for comparison purposes. Furthermore, there may be separate legal issues relating to whether you are now responsible for paying taxes on the property or its upkeep or maintenance which should also factor into your final assessment as owners. It is important that each of you have competent appraisers inspect your individual share of the property so that there can be no question about its value.
One Person in Charge
If one of the trusts is not properly managed, it may lead to legal trouble because family members will be held responsible for negligence and breach of fiduciary duties. In addition, non-family members who knowingly or unknowingly participate in negligent management can also face legal consequences. Colorado Springs real estate law firm can help you to implement a proper family trust agreement to protect the interests of everyone involved. A well-written trust agreement is crucial in ensuring that each person understands their responsibilities under the agreement and has a checklist with deadlines for common tasks like paying property taxes or performing routine maintenance on the home. Without an organized system, it is easy for individual siblings to forget about their responsibilities.
The sad truth is that nearly 70 percent of Americans die without a will in place. Communication is key and an essential tip for siblings dealing with an inherited property in Colorado Springs.
Real estate wealth in the U.S. grew more than 90 percent from 2000-2009, but despite this recent growth, it is still a small part of overall household wealth in the country. The largest segment of financial assets other than home value is defined contribution plans (401k’s and 403b’s); some 81 percent of households have one or more of these accounts, says Deloitte Financial Advisory Services Web site..
This means that as Americans move away from owning homes to saving for retirement and education needs first, they need to make sure their heirs are prepared. Family discussions about wills and trusts are important so that inheritances will be distributed fairly among family members.
Why Divide the Inheritance?
Parents may want to divide an inheritance or transfer property to their children for several reasons. A spouse may not be supportive of a child’s chosen career path, forcing that child and the parent to agree on another plan of action. A family business may be taken over by one sibling; in such cases, it is common for other siblings [to make up] any deficit. It should also be noted that many parents are concerned with protecting heirs from potential creditors or lawsuits involving them after they pass away. However, these situations must be carefully considered because each scenario presents its own set of complications.
There is no doubt that disagreements will come up along the way, but you don’t want these minor issues to bog down your effort and make people sick of the process.
As a sibling dealing with an inherited home, do not make any permanent changes that can be reversed without consulting your siblings. This situation is very likely temporary and goes against family values of pleasing one another when appropriate. Do not renovate or sell the house without consulting each other, even if just over email. Changes like this that are easily reversible simply because they require money for completion should only be made on the authority of the person with power of attorney.
Sell and Divide
In addition, there are many situations in which aspects of the property, such as land or buildings, need a division into shares that are equal for each sibling. For example, if one sibling inherited a home and garage with no mortgage while another sibling received a duplex on the same block worth $300,000 cash and $100,000 mortgage balance with an escrow account containing title insurance money (free and clear), then you must first calculate the fair market value of both properties; i.e., home plus garage divided by 2 + duplex equals fair market values per share. Subtract these numbers from their respective totals to get your final numbers.
At HBR Colorado, we can help siblings quickly and easily deal with selling an inherited property in Colorado Springs. Would you like to run your situation by a professional without any obligation? Feel free to ask us any questions or share any concerns you might have about the process. The professional buyers at HBR Colorado and our supporting team of professionals have a system that allows us to close with cash in a matter of days or weeks when you are ready to sell. Send us a message or call HBR Colorado at (719) 286-0053, we are happy to help.