Inheriting a House without a Will
You’ve inherited a house without a Will. As if times weren’t tough enough… Now you will have to jump through a bunch of hoops in order to sell this property. Let’s talk about those hoops and point out some pitfalls to watch out for.
But first, real quick, my name is Jeff Chubb and I am a recovering Investment banker, turned real estate agent that has sold more than a 1,000 properties. We get calls, texts and emails from folks just like you who are looking to sell a property and I absolutely love it! So whether you are looking to sell a property in the next 9 or 90 days… It doesn’t matter. Give us a call, shoot us an email or stop by YouTubeRealEstateAgent.com and fill in your information and we will reach out to you!
Inheriting a house without a Will will be determined by the state specific intestate succession laws. First we will talk in generalities and then use Massachusetts as an example on how things would work.
Intestate Succession laws vary by jurisdiction, but they generally determine the distribution of assets which includes real estate when someone passes away.
The deceased person is termed intestate. Now the estate of a person who has died intestate goes through probate court. This ensures of the proper distribution and the right heirs have received what they are owed.
We will use Massachusetts intestate order in a couple moments as an example, but typically the succession of assets starts with immediate family, specifically a spouse. And then if there is no spouse then it goes to children. No children, then it goes to parents or siblings. This is where each state may differ.
But the first place all states stop is when you have joint ownership of the asset. If the property was owned jointly with rights of survivorship, then the surviving co-owner typically inherits the deceased person’s share.
This is why my mom didn’t have to go to probate when my dad passed away. She just inherited his share of ownership. As joint ownership often bypasses the probate process.
Without a will, then the estate will generally go through probate. This is where the court supervises the distribution of assets based on the state's intestate order.
An administrator or personal representative is appointed by the court. The representative will pay all debts, taxes and then distribute the remaining assets according to the state’s intestate succession laws.
The property sale often needs to be approved by the court. And this makes sense, right. Imagine I was the representative of the estate and I didn’t like my brother and I wanted to screw him out of his inheritance. Well then I would sell the house to my buddy for cheap money and he would just pay me a sum on the side.
A court's blessing makes a lot of sense here.
A MAJOR pitfall here is not maintaining the property after the passing. It is essential to ensure that the property is maintained, that taxes are paid and insurance remains in force.
And speaking of insurance. This would be pitfall number 2. Most insurance policies do not cover vacant houses. A property is considered vacant after 30 days. In other words, you NEED to call the insurance company and let them know about the vacant status of the property. This could cause the premium to increase or create a situation where you need to look for new insurance. All a hassle, but a heck of a lot better then something happening to the property and there being no insurance to cover the damages.
The third pitfall is if and when there is contesting heirship. This is when a dispute arises among potential heirs. And this happens especially in the absence of a will. Expect a good amount of legal action here. This will undoubtedly drag out the process of divesting the property.
And the fourth pitfall revolves around Tenancy Issues. A lease always revolves around the property. Not the owner. So if the property is rented out then the lease supersedes everything else. You will need to consider the existing tenancy agreement as that tenant has rights. A tenant who sees their good time of lower than market rent coming to an end can be a major pain in the back side. Tenants can make this situation miserable.
It is highly advisable to consult with an attorney who specializes with probate and estate law in the specific jurisdiction that the property is in. They will guide you through the legal intricacies and ensure that the heir’s rights are protected while helping make it a seamless process.
So let’s use Massachusetts as an example. The heir has passed away.
The first line of succession is to the Spouse and Descendants. If there is a spouse and descendants which could be children or even grandchildren and all of the descendants are of that marriage, then the spouse inherits everything. HOWEVER, if there are descendants from outside of the marriage, then the spouse gets the first $100,000 plus half of the balance. The descendants would get everything else.
Now let’s say it is a Spouse and Parents and no descendants. In this case the surviving spouse inherits the first $200,000 plus three-quarters of the estate balance. The parents would get the remainder.
If it’s Descendants Only with no spouse then they descendants inherit everything.
If it’s Parents Only with no spouse or descendants, then the parents inherit everything.
And then comes Siblings, Nieces and Nephews in the succession line. This is if there are no closer relatives then siblings and if their sibling has passed then that sibling's descendants would inherit the property.
And if none of the above exist, then the state looks for other relatives like grandparents, aunts, uncles and cousins!
And if no relatives are found, then the property “escheats” which means it reverts back to the state.
And that was a lot… It makes a lot of sense why the state gets involved when you hear and see it like this!
Again, my name is Jeff Chubb with the Chubb Homes Team. I hope you found this video helpful. This is a lot of information. And this entire process comes at you very quickly as you are just thrown into this unprepared in most cases.
I have extensive knowledge working with estates. I can help you sell the house traditionally where we maximize the asset price or even offer you a cash offer for a seamless and mindless sales process.
Yes, I personally can only help people in Massachusetts, but I do have expert agents that I work with all over the country. And it would be a true pleasure to make an introduction for you… At no cost to you obviously!
But no matter where the property is located, if you are looking for a cash offer, then I can help.
If you have questions, or are interested in selling your hoarder house, then give me a call, shoot me an email or visit us at YouTubeRealEstateAgent.com. You can also find my information in the description below.
Until next time.