Real estate inheritance runs into probate, tax issues

DEAR BOB: In 1993, my wife’s father died. He left everythingto her in his will. There are no siblings or other close relatives. Knowing sheinherited the house, we moved our family in and have been living in the houseand paying its mortgage ever since. Now that our kids are grown and on theirown, we want to sell the house and “downsize” for our retirement yearsahead. However, when we talked with a Realtor about listing the house for sale,she said we can’t sell it until my father-in-law’s estate is probated and thehouse title is transferred to my wife. Is there any way to avoid probate?–Jerome W.

DEAR JEROME: No. However, many states have speedy smallestate probate procedures for situations like the one you describe. Becauseyour late father-in-law willed his house, probate court proceedings are usuallyrequired.

Purchase Bob Bruss reports online.

Probate could have been completely avoided if he held titlein his revocable living trust, specifying that after his death the house shouldgo to your wife. However, it’s now too late for that.

I suggest that your wife consult a local experienced probateattorney to probate the will. He or she can often expedite uncontested probatematters in less than the six to 12 months usually required.

But your wife has another problem to consider. When shereceives the title, she will receive a new stepped-up basis to market value in1993. Since then, the house has probably greatly appreciated in market value.

However, you and she can’t qualify for the Internal RevenueCode 121 principal residence sale tax exemption up to $500,000 because shehasn’t owned the house at least 24 months (although you both clearly meet the24-month occupancy test). Consultation with your tax adviser is stronglysuggested.

IS HEIR LIABLE FOR PROPERTY TAX ON WORTHLESS LAND?

DEAR BOB: About five years ago, my aunt died. She lefteverything to me, including a worthless lot. I consulted several nearbyRealtors and they wouldn’t even list it for sale as it is only worth around$5,000. However, the county keeps sending me the property tax bills, which Ihaven’t paid. They have tried to sell the property at a tax sale but nobodywill buy it even for the amount of unpaid property taxes. Now the countyreported to the credit bureaus that I owe the unpaid taxes and this is hurtingmy credit rating. What can I do? –Ralph R.

DEAR RALPH: It is very unfair for counties to report unpaidproperty taxes to the credit bureaus, especially when you inherited worthlessproperty you don’t want.

Perhaps you can contact the county tax collector to see ifhe will accept your quitclaim deed in return for canceling the property taxes.Then you can tell the credit bureaus the property taxes have been cancelled sothe adverse information can be removed from your credit reports.

CALL HEALTH DEPARTMENT ABOUT DOG STENCH PROBLEM

DEAR BOB: I live in a condo complex where one owner has fourbarking dogs. The neighbor has never walked the dogs and keeps them in a tinyfenced patio. The smell is unbearable in hot weather. The condo homeowner’sassociation refuses to act even though the CC&Rs (covenants, conditions andrestrictions) only allow one small pet. What can be done? –Dorothy J.

DEAR DOROTHY: Shame on your ineffective homeownerassociation board of directors and officers for refusing to enforce theCC&Rs. However, your city or county health department, or the local humanesociety, can take action to abate this nuisance, which is also a healthproblem. A few phone calls should solve the problem.

The new Robert Bruss special report, “How to Sell YourHouse or Condo for Top Dollar With or Without a Real Estate Agent,” is nowavailable for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or bycredit card at 1-800-736-1736 or instant Internet delivery at www.bobbruss.com. Questions for this columnare welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2006 Inman News

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