Selling an Inherited Property in Ohio

Inheriting a property can be a challenging experience, both emotionally and financially. Questions may arise regarding costly upgrades, necessary repairs, tax implications, and the complexities of wills or probate proceedings. However, inherited properties present a unique opportunity for real estate investors and buyers seeking a discounted property to personalize. For homeowners looking to sell an inherited property in Ohio, Ohio, there are specific considerations to address. This guide aims to outline the essential steps involved in selling an inherited property, potentially yielding a profitable outcome for the seller.

How To Sell An Inherited Property in Ohio

So you’ve inherited a property and you’re not sure what happens next. In most states, the inherited property must go through a probate process so the courts can determine who is the legal owner. Probate is a legal process in which the Court legally transfers ownership of the estate’s assets to one or more beneficiaries and/or Heirs. Depending on the state of the will (if there was one), this process can be very fast or very slow.

Determine the Executor

When it comes to inherited properties with a will, the key step is to establish the executor of the estate. An essential element of any will is appointing an executor capable of fulfilling the deceased’s wishes during the probate process. Assets mentioned in a will cannot be sold until the Court validates the will. Following approval, the assigned executor has the authority to execute the deceased’s wishes. However, if the will faces a challenge or if there is no will in place, the proceedings may be prolonged as the Court intervenes.

The probate court will appoint someone not associated with the family as an administrator to the estate. These administrators play a similar role as an executor; they are responsible for carrying out the wishes of the deceased as stated in the will, as well as paying off any of the estate’s debts and distributing any assets. They may also determine if any real estate assets will need to be sold to pay off the estate’s debts, including back taxes, mortgages, etc.

Working with Lawyers and Real Estate Agents

Probate can be a complex process, underscoring the importance of engaging an experienced lawyer to guide you through the potential challenges of selling an inherited home. Once you obtain approval from the probate court to proceed with the property sale, the next prudent move is to collaborate with a real estate agent well-versed in handling inherited properties. A proficient agent with probate expertise comprehends the intricacies and legalities involved in such transactions. They can assist you in identifying the ideal buyer to secure the best possible price for the inherited property. Moreover, they can offer valuable insights on discerning which repairs and upgrades are worthwhile investments and which are not. Following their counsel could significantly impact the speed and profitability of the sale, differentiating between a swift, profitable transaction and a prolonged listing resulting in a below-market sale price.

Resolve Any Debts

Have you ever considered the complexities that come with inheritance? It’s not always about receiving a dreamy mansion from a long-lost relative. In reality, inheriting a property can come with various challenges such as existing liens, overdue taxes, and a burdensome mortgage that can eat into any potential profits from a sale. Dealing with the aftermath of a loved one’s passing often involves managing their financial obligations, whether it involves settling taxes, paying off a mortgage, or clearing out credit card debts. Prior to benefiting from any inherited assets, settling outstanding debts is typically the primary concern. Despite the perceived value of inheriting a house, it can quickly turn into a financial burden. Seeking guidance from a knowledgeable estate advisor is crucial to explore the best strategies for handling an inherited estate.

Clean & Restore the Home

After finalizing ownership of the property in Ohio, Ohio [market_zip], your next crucial decision is determining whether to reside in it, lease it out, or put it on the market. In many cases, inheriting a property involves dealing with a house that may be in a state of disrepair. Whether it has been neglected for years and requires extensive cleaning and maintenance, or it lacks modern upgrades necessitating a complete renovation for market appeal, this aspect of inheritance is frequently overlooked.

Do all heirs have to agree to sell the property?

When it comes to selling an inherited house or property, the need for heirs to agree depends on the establishment of ownership. If ownership is confirmed by a will or the probate court, individual heirs do not need to agree to the sale. However, in cases where ownership is not established, such as in estates without a will or with a court-appointed administrator, unanimous consent from all heirs is required for the sale to proceed. This requirement also applies to properties auctioned by the court to settle the estate’s debts. In situations where a buyer acquires a house at auction but faces objections from some heirs, the sale may be paused until consensus is reached through negotiation and settlement.

How to Settle a Disagreement

When Heirs disagree over an estate, it is crucial to explore various options for resolution. The initial crucial step involves appointing an executor to oversee the implementation of the deceased’s wishes outlined in the will. This executor acts as the key individual to prevent disputes regarding asset distribution. In cases where no executor is named, leading to will disputes, the recommended course of action involves engaging a mediator. By involving a neutral third party, preferably a mediator, in resolving conflicts, you can potentially avoid costly and time-consuming legal battles in probate court.

Best Practices

What if the issue revolves around the executor themselves? Disputes may arise when a family member is designated as the executor or trustee of a will, leading to conflicts with other family members. If you find yourself in this situation, one option is for the individual to decline the appointment and opt for an independent fiduciary, such as an estate-planning attorney, to manage the will. By stepping aside and allowing a neutral party to take over, you not only prevent arguments but also provide everyone with the necessary time and space to navigate through challenging emotions before any lasting harm is done to your family.

How is inherited property taxed when sold?

Did you know that in 2020, state and local governments in the United States accumulated a staggering $5.3 billion in revenue from estate and inheritance taxes? The variation in laws and regulations from state to state makes it imperative to conduct thorough research and seek guidance from a seasoned lawyer well-versed in taxes and estate planning. Whether you’re navigating a sudden inheritance or drafting your will, expert advice is crucial.

State Tax Laws

Each state has different laws regarding inheritances. In the case of the sale of an inherited property, states may take an estate tax, an inheritance tax, as well as a capital gains tax on your inheritance. Currently, twelve states have an estate tax, 5 have an inheritance tax, and one has both an estate and inheritance tax.

Capital Gains Tax on Inherited Property

What is the capital gains tax and which states require it? The capital gains tax is paid on the appreciation of any assets that an heir inherits through an estate but it is only levied once the asset is sold for a profit, not when you inherit. This tax is then paid on the difference between the sale price and the purchase price of the property. Most states require this tax paid on an inherited property, but there may be exemptions for individuals selling a property for less than a certain amount. An example is Washington State, where the capital gains tax is not levied on homes and/or properties sold for less than $250,000. There may also be other legal ways to get around or reduce the capital gains tax in your state, including reinvesting the money in another property. Consult with a tax lawyer knowledgeable of the laws in the area you will be selling before proceeding with the sale of your property.

Estate Taxes

An estate tax is a tax paid directly out of the estate to the state before anyone is able to inherit it. Worried that you might get a huge hit taken from the estate? Don’t worry! The estate tax has a minimum threshold which in 2023 was $12.92 million for individuals. This means that the government is not able to charge you an estate tax unless your total taxable estate is worth $12,920,001. The remainder is passed on estate tax-free. Despite having such a high threshold, each year more states repeal their estate tax laws, losing out on millions of dollars of revenue.

Inheritance Taxes

Only six states have an inheritance tax, meaning that it is likely that you are in the lucky majority that won’t have to deal with this. But if you live in one of those six states – Maryland, Nebraska, Kentucky, New Jersey, Pennsylvania, and Iowa – you as a beneficiary/Heir to an estate will be required to pay taxes on your inherited assets and properties. But don’t worry – even if you live in a state that has an inheritance tax, you won’t have to pay a dime if the deceased lived in one of the 44 states that does not have this tax.

Essential Documents for Selling an Inherited Property

To show legal ownership and place a property for sale, you will need to have a copy of the documents issued by the court that grant you the legal authority to act as the executor or administrator of the estate. These documents will establish your ability to manage the inherited property. Once a buyer is found and you are ready to close, you’ll need the deed, title insurance, or other relevant legal records to establish the legal ownership of the inherited property. 

Do your research regarding what additional documents may be needed to sell an inherited property! Some jurisdictions may require additional property-related documents, including previous surveys, inspections, or any other relevant paperwork that pertains to the property’s condition or history.

Is there an easier way to sell?

Yes, there is! D 57 Investments LLC is a direct house buying company that has built our reputation on buying inherited houses for cash with less stress and less fees. Contact us today and get a competitive cash offer for an inherited house, condo, or property. We buy homes in any condition, and we can also help with the convoluted process of selling a house in probate! Let us make your home selling experience as straightforward and stress-free as possible so you can move on with your life.

Even if the house suffered major damage in the last storm or was neglected for years and needs a large amount of upgrades to make it “market ready”, once you accept our fair cash offer our team of experts will handle all of those expensive repairs so you don’t have to! We make selling an inherited house easy.