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Inheriting Property

By: Beth Morrisey MLIS - Updated: 23 Jul 2017 | comments*Discuss
 
Property private Property inheritance

When someone dies any private property (or shares in a private property) that (s)he owned will become a part of his or her estate. This estate will be distributed according to the law either by the executor (someone named in the deceased’s will) or administrator (someone appointed by law in the event that no will was left). Depending on the type of property held and the instructions left in the will, there are many ways in which an individual could inherit property and many rights and responsibilities that come along with such an inheritance.

Ways of Inheriting Property

There are three main ways in which private property can be inherited. The first is if the deceased and the inheritor were living together in a property held as a “joint tenancy”. Upon the death, the surviving member of this agreement inherits the entire property automatically. The second common way of inheriting property is if the property was owned as a “tenancy in common”, then the inheritor will be awarded the deceased’s share in the property either as stipulated in the deceased’s will or according to the laws of intestacy/succession (in the event that no will exists). Finally, if the deceased owned the property outright then it will be inherited according to the deceased’s will or the laws of intestacy/succession (again if no will exists).

Debts and Inherited Property

Property that is inherited will usually not be released to the inheritor until all debts have been cleared from the deceased’s estate. However, it may be that outstanding debts exist and the property must be sold in order to make up these debts. If such is the case, the inheritor should be informed of these developments and should be kept informed about the process by the executor or administrator of the will. Generally if the property was held as a joint tenancy then all other avenues of paying debts will be explored before the idea of selling the property must be raised, but if it is impossible to pay these debts otherwise then selling may be the only option. Working with a solicitor will help make all details clear about specific cases.

Uses of an Inherited Property

Sometimes the properties inherited after a death are already inhabited by tenants. Whether or not this arrangement will continue is up to the new owner. However, if it does continue then the new owner becomes the landlord and must shoulder all of the responsibilities of this position as stipulated by the law. Regardless of whether the new owner is hoping to sell the property, inhabit the property him/herself or continue renting the property to others, a solicitor should be consulted to ensure that all laws are followed regarding these transactions. If a new owner does intend to move into the property, (s)he should consult a solicitor regarding the existence of any tenants, registering the property in his/her name, nominating the property as his/her main home with the Tax Office, taking on mortgage payments, paying any applicable taxes and anything else related to his/her specific situation.

Inheriting property is not usually a straightforward affair. There are many ways of inheriting property, and many more issues that must be dealt with such as taxes on the property, the property being used to pay off debts, relationships with existing tenants living in the property, tax issues surrounding the property becoming the owner’s main home, the new owner taking over the mortgage on the property and much more. If possible, the guidance of a solicitor should always be sought in case of private property inheritance.

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My great uncle left me a property a few years back. As my aunty outlived him he made it clear that she can live out her days in said property. Recently she has been moved to a home so is no longer a Tennant. She is also not in sane mind to make her own decisions. I have received a letter from the director who has been appointed. He seems to indicate that the house may be sold in the foreseeable future. To pay for potential costs of her care. I have reason to believe she still has funds available to her. Should I be worried that they're going to try and rack up her care bills to the point where they sell the house and I'm left with potentially nothing? Would I benefit from seeking formal legal advise and somebody to fight my corner for me? Would it be worth doing? Or is it out of my hands? Thank you for any responses.
James - 23-Jul-17 @ 7:02 AM
Hi there. My husband and his mum inherited 25% share each of his grandparents house when his grandad passed away 8 years ago. His grandmother has now recently passed away and so he inherits another 25% each and so does his mum ... would they have to loose 40% if this over 325k or should they get some carried over allowance or something ? Sorry I'm not in the know I'm afraid and it's so confusing ! Thankyou
Jo.b - 20-Jul-17 @ 9:40 PM
My dad passed away last year .in his will he left the house to my brother to live in as long as he'd like .but if he sells it or passes any it will be slit between myself brother and nephew and niece . He has decided to marry would his new wife be entitled to the home if he died before her or will it still go as dad wished
Marie - 15-Jul-17 @ 9:03 AM
My brother and I are named on the deeds to my mother's house. The executer is my Husband. He has to make sure all debt is paid before the house can be released is this correct. Or because the deeds are already in our names can the brother go ahead and enter the property. All goods inside belong to me it is in the will.
Ja - 17-Jun-17 @ 2:10 PM
Paulab- Your Question:
Hi,I'm due to inherit my parents house along with my brother once the time comes.I'm just wondering if my husband is entitled to my half too? It is only my name and my brother's on the will but because I'm married, does that mean I have to share any profit from a sale with my husband?Thanks in advance

Our Response:
You can do what like with your inheritance. If you get divorced it will be considered in any sharing out of marital finances etc.
FacingBereavement - 6-Jun-17 @ 1:03 PM
Hi, I'm due to inherit my parents house along with my brother once the time comes. I'm just wondering if my husband is entitled to my half too? It is only my name and my brother's on the will but because I'm married, does that mean i have to share any profit from a sale with my husband? Thanks in advance
Paulab - 3-Jun-17 @ 9:38 PM
Caz - Your Question:
My mother has made a will which of which my sister and I are the Trustees and executrices. It states all her possessions and estate which includes her property is to go to me and my sister for us to "sell and/or retain all or and part and I DIRECT THAT MY TRUSTEES Shall stand possessed of my estate and divide the same into two equal parts". As it says everything must be divided into two equal parts To achieve this , I believe the house would need to be sold, but my sister is saying she doesn't want that. So what happens in a situation like this? She doesn't have the money to buy me out so would I need to obtain a court order to enable the house to be sold? Or would the house be put into both our names? I don't want this. I just want it sold and for me to get my share as my sister and I do not get on and owning a house with her just would not work.

Our Response:
No if you can't agree, the house would have to be sold and the proceeds split.
FacingBereavement - 30-May-17 @ 2:15 PM
Gilly - Your Question:
Hi my mum has not long passed away and in her will she left me everything including the house which I lived in as well as her carer. I have lived here nearly all my life a part from a few years. I am the only child. I have no intentions of selling or moving out. Will I have to pay inheritance tax? The house is worth more than the allowance, my dad died 9 years ago did they have allowances that would go towards the value of the property as I know nothing about any of this. I'm worried as this is my home and don't want to lose it. X

Our Response:
You father's IHT allowance would also count so IHT would only be payable on an amount greater than £650,000. New rules from last month (April 2017) allow an extra £100,000 if the property is passed to a family member. If the value of the property plus any additional finances/assets is greater than £750,000 therefore you will need to pay tax on anything above that amount.
FacingBereavement - 30-May-17 @ 10:43 AM
My mother has made a will which of which my sister and I are the Trustees and executrices. It states all her possessions and estate which includes her property is to go to me and my sister for us to "sell and/or retain all or and part and I DIRECT THAT MY TRUSTEES Shall stand possessed of my estate and divide the same into two equal parts". As it says everything must be divided into two equal parts To achieve this , I believe the house would need to be sold, but my sister is saying she doesn't want that. So what happens in a situation like this? She doesn't have the money to buy me out so would I need to obtain a court order to enable the house to be sold? Or would the house be put into both our names? I don't want this. I just want it sold and for me to get my share as my sister and I do not get on and owning a house with her just would not work.
Caz - 28-May-17 @ 9:25 AM
Hi my mum has not long passed away and in her will she left me everything including the house which I lived in as well as her carer. I have lived here nearly all my life a part from a few years. I am the only child. I have no intentions of selling or moving out. Will I have to pay inheritance tax? The house is worth more than the allowance, my dad died 9 years ago did they have allowances that would go towards the value of the property as I know nothing about any of this. I'm worried as this is my home and don't want to lose it. X
Gilly - 27-May-17 @ 7:37 AM
I lived with my grandmother for several years before she passed now the hospital wants to sell the house to pay bills that me and my whole family think she would not have incurred if it wasn't for their mistakes. Do I even have a leg to stand on or should I just let them have it?
Scared - 26-May-17 @ 2:45 AM
My father recently passed away and he owned a house with his partner not married he payed towards the mortgage each month and paid the deposit for the mortgage am I entitled to any part of this house ??
Beez84 - 22-May-17 @ 10:57 PM
Hi My dad has just passed away and he lived with his partner not married and they owned a house but his name was not ok the mortgage but he put the deposit down and made payments every month for about 4 years, I am I entitled to any share of this house??
Beez84 - 22-May-17 @ 10:52 PM
Jakeybabes - Your Question:
My sister in law willed her house to her two sons one brother died what happens to the property does the deceased brothers half go to his daughter

Our Response:
Assuming she is still alive, she could change the Will, if she can't/doesn't do this then the gift made in the Will "fails" because of the death of the legatee (your brother) before the person who made the Will (your sister in law). The property "falls into residue"- his share of the property might then be divided as if she had died intestate, meaning his offspring would inherit. You might like to check this with a legal professional to be sure.
FacingBereavement - 16-May-17 @ 11:30 AM
My sister in law willed her house to her two sons one brother died what happens to the property does the deceased brothers half go to his daughter
Jakeybabes - 15-May-17 @ 9:35 AM
dicko - Your Question:
My father died and his will was split between myself and my sister, if I died a few months later would my sister get the lot or would my children get my half

Our Response:
If you die after the estate has been administered, your children (or spouse if you have one), will inherit.
FacingBereavement - 9-May-17 @ 10:36 AM
My father died and his will was split between myself and my sister, if I died a few months later would my sister get the lot or would my children get my half
dicko - 7-May-17 @ 12:54 PM
My parents set up a Discretionary Trust as I am on means tested benefits . I am main beneficiary of trust followed by my brother . In 2008 my brother who is a chartered surveyor valued my parents house £185000 . The house has been left in parents will as equal to both siblings The trust now owns 50% of property and my brother refuses to permit me and the trust to rent to house as equal partners . He wants full control and wants to buy trusts half share . He offered £300.000 paying trust £150.000 after trust acquired 3 valuations . My brother has agreed to pay all the trusts CGT and up to £1000 of my legal fees However if I refuse to sell my share he can take the trust to court and force trust to sell its share and request trust pays all his legal costs ! If we sell trusts share : trust willnot be able to obtain any future capital gain to match renting out the entire house and I feel my brother is taking advantage of my situation as I am disabled and weak living in a rented council fkat on means tested benefits that will stop as soon as Trust inherits funds ! Then it will take one year for the trust to challenge DWP as a Discretiobary trust is not permitted legally to disperse payments for my own living expenses rent poll tax ! So I will need to find a way of paying my expenses until litigation is completed . The trust will not be able to be reimbursed any legal costs either . So it seems I am being pushed into a corner by a sibling who is a millionaire in his own right . I ask if I insert an anti embarrassment clause that the trust should receive 50 % after expenses from my brother if he rents the house or same if he sells house within 6 year period , would this be an option ? Or he could just refuse to agree to this and take me to court Welcom advice here
Wideyes - 28-Apr-17 @ 3:24 AM
Hi my cousin lived with my auntie for over 10 years, the house and everything was left to my cousin and now auntie has passed, the house is valued at 485,000 will my cousin have to pay IHT ?
Cuzz - 22-Apr-17 @ 6:59 PM
I moved into my mother's house 10 years ago to care for her.Her will leaves property to me.Property worth about £195,000.Will I need to get probate.She has no other money or property.
Buntybo - 21-Apr-17 @ 6:24 PM
patty - Your Question:
I live with my long standing partner (unmarried) we have one child (she is 24) together.He has a child from a previous marriage.We live together as a family of three ,the house has only my name on deeds.If I die will the house be automatically passed on to my daughter there is no will

Our Response:
It should do unless your partner applies to court to claim that he has made financial contributions towards the property and there is a dependent child in the relationship/property. You should make a Will if you want to make specific arrangements.
FacingBereavement - 19-Apr-17 @ 2:12 PM
I live with my long standing partner (unmarried) we have one child (she is 24) together .Hehas a child from a previous marriage .We live together as a family of three ,the house has only my name on deeds .If i die will the house be automatically passed on to my daughter there is no will
patty - 17-Apr-17 @ 12:09 PM
Vickie - Your Question:
My husband has been named to inhearate all hid dads real and personal property. His aunt D is named executor. she says there is like 13,000 debt owed for funeral and a small personal loan the home is paid for. my ? Is can she sell the house if we want to live as permenat residence. and can she keep us leagaly of property. I am trying to get up the money owed if and when I do can I pay debt and it all be done to finish he passed in Nov. 2016.

Our Response:
It is the responsibility of the executor to pay for any funeral expenses and outstanding debts etc from the estate before any of the remainder is distributed.
FacingBereavement - 13-Apr-17 @ 12:45 PM
My husband has been named to inhearate all hid dads real and personal property. His aunt D is named executor . she says there is like 13,000 debt owed for funeral and a small personal loan the home is paid for . my ? Is can she sell the house if we want to live as permenat residence . and can she keep us leagaly of property. I am trying to get up the money owed if and when i do can I pay debt and it all be done to finish he passed in Nov. 2016 .
Vickie - 11-Apr-17 @ 4:05 PM
Hello, My grandmother died and left her house to my uncles who lived there, one of them died 4 years later and did not make a will, the other died two years ago and did not leave a will, but left a lot of debt. Did my mother inherit 25% of the property on the death of the first of her brothers?
AJ - 8-Apr-17 @ 11:33 AM
My father passed away last june, what rights does his [partner have as she is living in my fathers property. I have been left half of his estate which includes the house,
IAN - 6-Apr-17 @ 9:50 PM
Lis - Your Question:
My partner and I aren't married, we have one child. There is no will. I know I have to rights to any if his estate if he dies and it will all pass to our daughter, she is a minor and will be for some time. If the house is in my partners name only what would happen? Can we still live in the house or would it have to be sold and the money held in trust for our daughter? Also can I be her trustee or must it be someone independent? What would happen to money in a joint account would have become my daughter's? Thanks

Our Response:
It would be easier to write a Will together with your partner, so you would know about all this in advance. If there is no Will, the estate does not automatically go to the partner and you might need to go through the courts to resolve this and ensure you are provided for. So a Will is the best approach and will save you money and hassle in the long term.
FacingBereavement - 6-Apr-17 @ 10:26 AM
Lily - Your Question:
Mum and dad owned house (tenancy in common) and when Mum died last year she left in her will her half to us, her kids. Land registry changed to our names so we now co-own the house with our dad. He is alive and will continue to live in the house. My question is, does the inheritance tax on what is now our inherited half of the house have to be paid already at this stage or can it be left until such times as dad passes away and then dealt with? Or if we leave it til then, will we be penalized in any any way?

Our Response:
Yes you will pay IHT on an inheritance threshold of £325,000 per person, you pay 40% of any value over that threshold. If IHT is due it is payable within 6 months of the end of the month in which your mother died. If you can't sell your interest in the estate (i.e there's no cash in the estate at the moment), you can arrange to pay the tax in monthly instalments over 10 years (interest will be payable).
FacingBereavement - 5-Apr-17 @ 2:07 PM
My partner and I aren't married, we have one child. There is no will. I know I have to rights to any if his estate if he dies and it will all pass to our daughter, she is a minor and will be for some time. If the house is in my partners name only what would happen? Can we still live in the house or would it have to be sold and the money held in trust for our daughter? Also can I be her trustee or must it be someone independent? What would happen to money in a joint account would have become my daughter's? Thanks
Lis - 4-Apr-17 @ 12:27 PM
Mum and dad owned house (tenancy in common) and when Mum died last year she left in her will her half to us, her kids. Land registry changed to our names so we now co-own the house with our dad. He is alive and will continue to live in the house. My question is, does the inheritance tax on what is now our inherited half of the house have to be paid already at this stage or can it be left until such times as dad passes away and then dealt with? Or if we leave it til then, will we be penalized in any any way?
Lily - 2-Apr-17 @ 9:55 AM
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