With a greater number of baby boomers and senior adults struggling with debt, it’s conceivable that inheriting the family home from a parent upon his or her death may be more of a financial burden than a blessing.
According to State Housing Profiles 2011 (AARP), the percentage of homeowners age 50+ who own their homes free and clear dropped, and the percentage still paying mortgages after age 50 rose.
Costs for medical care continue to skyrocket and eligibility for Medicare doesn’t begin until age 65. Even when seniors become eligible, Medicare does not cover expenses like hearing aids and dental care. Seniors may find it difficult to pay healthcare costs for final illness and keep up with the responsibilities of home ownership including paying property taxes and taking care of maintenance issues around the home.
How can you avoid costly mistakes after inheriting the family home? Here are three tips:
- 1. Consult an attorney. Creditors are notified after a family member dies, and the creditors will file a claim for repayment of any outstanding debt, including mortgages and homeowners’ association fees. An attorney will ensure that you are not bombarded by debt collectors who may try to make you feel responsible for your parent’s debts.
- 2. Inspect the property. If you are planning to sell the home, contact a real estate agent to see which improvement projects may help the home sell faster. A real estate agent will also give you a clearer picture of the home’s value when beneficiaries do not agree on a sale price.
- 3. Organize finances. Find out what is owed on the mortgage, and whether there are any liens on the property. Make sure all the taxes are current. Consult a tax professional to find out what taxes you’ll be responsible for on any gains you receive from the sale.
The emotional turmoil of losing a parent can make every decision regarding selling the family home difficult. Seeking the advice of professionals to piece together a clear picture will help you make good decisions after inheriting the family home