Inheriting a House: Everything You Need to Know

If you have inherited a house, there can be many unknowns. Especially if you haven’t been in the house for years or you live out of the area. In some cases your judgement gets clouded due to emotional connections you have with either the house or the loved one. I’m going to try and help you piece together the puzzle and make sure you are asking yourself the right questions. I definitely understand that this can bring up painful memories or maybe the wounds are still fresh. Either way, the first step is putting as much emotion aside as possible and thinking logically about the house, your situation and your options. This post is going to center on the ways that you can inherit a house to serve as the foundation about what you need to know about owning an inherited property.

There are two main ways people inherit properties. They are either willed the property or ownership is transferred via a living trust. While I’m most definitely not an attorney, there are a few things you should know about each method of inheritance.

Wills & Probate

A common method for inheriting a property is via a will. This means a loved one leaves a provision in their will for the property to transfer into your name upon their passing. Usually the person who is inheriting the property will also be put in charge of administering the estate. This administrator (called an executor) is responsible for filing all the necessary paperwork and working through the probate process. This is usually done through the county courthouse’s probate court. The process can get a bit convoluted, but the biggest thing to know is that the probate court will verify the validity of the will, notify any creditors who are owed money by the deceased and go through an accounting of assets owned. The role of an executor of an estate is an important one that has multiple responsibilities. Once the probate process is complete, you will then assume full ownership of the property.

Living Trusts

Another common method for inheriting real property is through a living trust. While trusts take a bit of money, time and attorneys to set up, it makes the process of transferring the assets much easier and less time consuming than the probate process. After the owner of the trust has passed away, the instructions left within the trust documents are followed to disburse any and all assets of the trust, with no court confirmation. Technically speaking, the original owner, the one who created the trust is called a “trustee” while the person who will inherit the assets is called a “beneficiary”. In many cases it can take as little as three weeks for the beneficiaries to become legally recognized owners of the trustee’s real property.

Those are the main ways people inherit property here in California and the US. It is vital to understand that while you may have been named as a beneficiary in a trust or been willed property, there is nothing you can do with the house until you are the full, legal owner. For trusts, it means waiting until the ownership change has been recorded with the county. For wills, it means that you need to complete the probate process within your county. Until that time happens, you must realize that you are technically not the owner of the property yet and you will not be able to sell it, make improvements, remove tenants, etc.

In future installments of this series, I’ll take a deeper look into why people sell inherited properties, provide a checklist of things you need to do when inheriting a property and give some helpful resources. Stay tuned!