Inheriting a Home in New York? Here’s Everything You Need to Know

When a loved one passes away, their home is often passed down to one or multiple heirs depending upon the situation. However, in most cases, people don’t inherit more than one property in their lifetime, so it’s a new challenge for someone in this situation to navigate. They are often unsure of what they will do with the home, and they may not even know the legal rights they have, especially if there is more than one heir to the home. Luckily, we have put together all the information that you need to know if you are inheriting a home in New York!

What You May Not Know About Inheriting a Home in New York

When a loved one dies and you are left to inherit a home, there are several things that may come as a surprise. For example:

  1. We all hope our loved ones have a detailed will that describes what to do with their home when they pass away. However, there are many situations in which the loved one did not update their will to include provisions about the home or do not have a will at all.
  2. The relationships within a family are going to complicate an inherited home. Children, half children, adopted children and even their marriages can make everything murky. And if there is no will…everyone is entitled to a piece of the home. This can make the situation that much harder to deal with, especially when the number of people that you are dealing with increases. If your family members get along well normally, it doesn’t mean that things will be smooth when you talk about splitting the potentially large amount of money from the sale of a home on Long Island where the median home price is $480,000.
  3. The financial drain of an inherited home often comes as a surprise to many people. Especially if the home has yet to be paid off. This means you have another mortgage to take care of. But, there are options that can help. You could also sell the home to an investor, or even rent this out to make the mortgage. You also have to consider the taxes on the inherited home especially if they are in arrears. Many tax collectors are willing to work with those who have inherited homes in New York.

Inheriting a Home in New York When there is No Will

As stated before, when there is no will, this becomes a huge mess for those who have inherited the home. When there is no will, the property becomes part of the estate and is distributed according to the “rules of intestacy”. The rules are determined by the Probate Code of the state. In almost every state, the estate would be distributed according to the following rules:

  • If there are no children or spouses, the estate is passed to the parents. 
  • If there are no surviving parents, then the estate goes to the siblings. 
  • If the siblings are no longer with us, then it would go to the nieces and nephews.
  • In the event that there are no surviving descendants, then the state is divided in half. It then goes to relatives on the mother’s side of the family and the other half goes to the father’s side of the family. 

If there is a spouse involved, then it becomes a bit more complicated. The estate has to be determined if this is Separate Property or Community Property

Separate property was owned by the one who has died before they were married. If there are no children, then the spouse is entitled to the estate. However, if the parents are alive, then they receive half of the property while the spouse gets the other half.  In the event that there is a spouse and children, then the spouse receives one-third of the personal property, the rest is divided among the children.

Community property was obtained during the marriage and is shared. The spouse that has survived gets all the community property as long as there are no other children with a different partner. If there are children from a different partner involved, then half of the community property is going to be given to the children, while the spouse retains the other half. 

Understanding who is entitled to what is a huge part of dealing with an inheritance without a will. However, there will also need to be an affidavit of heirship prepared. This is a legal document that states someone is the rightful heir to the property. It often contains history, genealogy, marital status and the like in order to prove that you are the rightful heir.  One this affidavit has been prepared, then the deed and the transfer of title can take place. All of these documents are then filed with the county records and the person has ownership of the home. From then on, the heir can do with the home as they please.

Inheriting a Home in New York Everything You Need to Know

How to Sell an Inherited Home with One Heir

When you have inherited a home in New York, your first instinct may be to sell the home. Especially if you have your own home and this was the home of a loved one. If you are the only heir to the home, then inheriting the home and selling it quickly should be a pretty simple process in New York. However, here are a few tips to keep in mind:

  1. Be sure that you put a vacant home insurance policy on the home to help with protection against liabilities. 
  2. Keep the utilities running and pay this.
  3. Remember to pay the property taxes.
  4. Also maintain the home since you want to sell this, the better shape this is in, the better it will sell.
  5. You will also want to take the time to clean out the personal items of the home and get rid of items to make it empty.
  6. Have your home appraised to find out just how much this home is worth so you have a better idea of what to ask for. 
  7. Consider whether you will list the home on the open real estate market or whether you want to consider selling to a real estate investor.

Remember that when you decide to go with an investor, you may find that you’ll be able to skip some of the steps above and the sale will happen much more quickly. Plus, the house can be sold as-is, without having to even empty it out, which is super convenient.

After inheriting the home in New York, if you are able to sell the home quickly, you will be shielded from capital gains taxes because you benefit from what’s called a step-up basis. This means that this home will be taxed based on the market value of the inherited home at the time of the owner’s death. So if the home has been owned by the deceased for 30 years and has appreciated a lot, you are not being taxed on these gains. And if you sell the property shortly after it’s inherited, then the market value from the step-up will be equal to what you sell the property for, resulting in no tax implications.

However, if you decide to live in the inherited home for 2+ years, then you can also get the benefit of the $250,000 (single) or $500,000 (married) tax exclusion since it’s your primary residence. This situation still benefits from the step-up basis and those capital gains tax exclusions begin to apply on any amount over the market value of the property at the time it was inherited. However, many heirs simply want the home out of their possession so they no longer have to worry about it or deal with moving their family into a new primary residence.

Selling an Inherited Home with More than One Heir

When there is more than one heir involved, oftentimes the idea of selling an inherited home in New York is more appealing than trying to figure out who gets to live in the inherited home. However, the problem comes when one heir doesn’t want to sell, while everyone else does. This is seen in several situations and it can cause a huge issue among the entire family. The case is made even worse when the will does not specify what the deceased wanted to be done with the home, or in the case that there is no will at all. So, what can you do?

You can file an inheritance partition in which the court will then divide the estate into separate portions that represent how much each heir inherited. The court will then force the sale of the property and the money that is made is divided among the heirs according to how much they inherited. This can be a huge financial hit as you often make less money and you have to consider legal fees as well. Plus, this can cause irreparable damage among the family. 

Often the better choice is for everyone to sit down with some mediation and find common ground. In some cases, one heir simply wants more money because they feel that they are being put out into the cold, especially if they lived in the home with the deceased, which is often the case when numerous siblings are heirs. With this being the case, many siblings opt to take a lower amount in order to get the one sibling on board with the decision to sell. It may not be the fairest action, but it does avoid court fees and alienating family members.

You can also decide to sell a portion to the one sibling who wants to keep the home. This works well, as the one heir gets the property and the others get the value of the property, which is what they wanted to do in the first place. This would typically be done by getting an appraisal to use to determine the market price at which to sell their interest in the home to the other person.

Selling an Inherited Home in Need of Repairs

When you are inheriting a home in New York that needs major repairs, this can be a huge stressor. Especially if it’s during the winter months and the house needs to be looked after – frozen pipes, shoveling, etc, After all, this doesn’t feel like a gift from a lost loved one…it feels more like a gigantic headache. In this type of situation, many heirs wonder if they can just sell the house without having to make the repairs or deal with the stress. After all, home repairs can be expensive and you are in the middle of dealing with the lost loved one. To make things even tougher, this often involves going through the deceased’s home to remove their personal belongings, with all the emotional elements that go into this process. When this is the situation, you may find that selling the home ‘as is’ to a professional home buyer is one of the best decisions that you can make for your mental well being. 

Selling to a real estate investor is one of the easiest ways to get rid of a home that you have inherited. This can be done whether you are the main heir or there are numerous heirs involved, and whether or not the home is in need of major repairs. When a real estate investor like Leave The Key Homebuyers looks at the home, they are going to consider what the home would be worth on the market if were in mint condition. They factor in the current state of the home and what repairs are going to cost them to make. They will also look at title issues or other legal obstacles that may be in the way since this is an inherited home. Once this has all been calculated, they then give a cash offer to the heirs that they can choose to accept. 

For those who have already inherited a home or if you are planning on inheriting a home, oftentimes it is easier to work with a local real estate investor in New York who buys these homes for cash. It eliminates having to use a real estate agent and paying a realtor commission. It eliminates the need to make repairs to the home, and the process is done super quickly. If you have inherited a home, this may be your best option and we are here to help!