When a loved one leaves you a property as a part of their estate planning, it is a gesture of love. In an ideal world, most people would love to live in the property as a way of honoring the dearly departed and keeping the asset in the family. In reality, though, selling is the logical choice for a growing number of beneficiaries.
There are many reasons to sell rather than keep the property. Here are five of the most common reasons why beneficiaries now take this option. And often seek a quick resolution.
Living In The Property Isn’t Viable
In previous generations, people left properties to loved ones, who could then use this as their way to own a property. Or step up from a modest home to a larger asset. In many cases, there was also the added benefit of moving back into their childhood house. In today’s world, though, situations look vastly different. For many, living in the property simply isn’t viable.
Whether it’s moving from the city to small towns, emigrating, or moving states for career moves doesn’t matter. The truth is that fewer people now live in the same town they grew up in. so, moving into the inherited property is often geographically impossible. Even if the location isn’t an issue, there could be many other potential problems relating to practicality.
The size of the home may not be suitable. The upheaval may cause difficulties. And even family disagreements and jealousy could mean that living in the home isn’t viable. Alternatively, the changes made by the previous occupant to aid accessibility in their old age may be an issue.
A Lack Of Knowledge About The Home
When inheriting a home, it’s not just about the asset itself. You also have to consider the running costs. For larger properties, utility bills and taxes could be too high for the beneficiary. This is before you even take renovation costs or unexpected overheads into account. Entering home ownership without clarity about the costs and logistics simply won’t suit many people.
Similarly, a lack of insight into the property could lead to issues down the line. For this reason, it may be beneficial to draw a line under the situation. A property transfer without warranty is often the best option available as it removes the threat of any future fallout. A quick sale process also helps avoid any losses caused by months or years of owning the property.
The gesture of leaving a property to a loved one is incredible. Still, it is a major legal and financial responsibility for people to take on. When their knowledge regarding the real estate asset is limited, many will find it easier to sell.
Funds Can Be Better Spent Elsewhere
Even a very modest property in relatively poor condition is worth a lot of money. Selling it frees up the capital, which will be a life-changing sum. For many beneficiaries, the funds generated by a sale could be better used elsewhere. Firstly, it could pay off debts, which also saves thousands in interest payments to protect the person’s financial future.
Another option is to invest funds in an area where they do possess useful knowledge. This could manifest as investing in cryptocurrencies, stocks, and other assets. Or the funds could be used to finally fund a business or even pay for studies that spearhead future career growth. The real estate asset could truly be the catalyst for finally opening doors for a better life.
There are options to keep the property running and create revenue by renting it out. Still, this can be time-consuming as well as a major responsibility. For the sake of the person’s peace of mind, as well as finances, selling makes more sense in many situations.
Financial Obligations
As well as using the funds in other areas of life, a sale may be needed in relation to inheritance. As already discussed, real estate is worth a lot of money. Therefore, inheritance tax will be sky high too for the beneficiary. If this has not been taken care of by the estate planning process, it is often necessary to sell. The funds can then clear that bill while still leaving a sizable sum.
In addition to inheritance tax bills, it can be a key step for minimizing capital gains tax. The quick sale of a property means that it hasn’t had time to gain value. Conversely, holding onto the property and completing upgrades with strong ROIs could see the value rise fast. While this does mean generating more funds, a lot of that is lost to taxes. Selling is the convenient route.
Besides, it is common for beneficiaries to start facing calls to settle these bills right away. It is the last thing they need at this time, especially when still grieving and supporting other loved ones. Leaving a quick sale to the experts settles the financial and emotional matters.
Emotional Detachment
Losing a loved one is never easy. It is one of the hardest things that any of us ever experiences. Anybody who has inherited a property likely had a very close relationship with the dearly departed. In many cases, the property itself holds memories too. While they are cherished memories, they are also heavily linked to the person who is no longer here.
While nobody wants to forget the lost loved one, it’s important to move on. Ownership of an inherited property could prevent this from happening. As such, it is often a wiser move to hold onto more sentimental items and family photos. The property can be sold, allowing the beneficiary to focus on healing from the heartache in a healthier way. It’s the least they deserve.
A lack of closure can hold a person back in many situations, and this is just one of them. Many who struggle with the process of losing a loved one find that the sale is a bookend moment. And it finally delivers a chance to start building a better future.
