Inheriting a home tends to be associated with close family members, such as parents or grandparents. But sometimes, you may receive a surprising letter or phone call informing you that you have inherited a property from someone you never met at all.
No matter how unusual it may sound, it is a real situation that can happen. When a person passes away without a clear will or immediate heirs, the legal system works through extended family lines to identify the next possible inheritor. So, in some cases, the inheritor may be someone who had no idea the connection even existed.
What should you be doing if this happens to you, and more importantly, what creates such a situation?
When The Property Owner Passes Away
Most unexpected inheritances begin with the passing of a property owner who lived alone. If there are no nearby family members checking on the home regularly, the property may remain empty until the authorities or neighbors notice something is wrong. Alternatively, the owner may have died at another location, so neighbors may only notice that the property is vacant.
Once the situation is discovered, the estate can enter the process of being settled. In some circumstances, families may need assistance restoring the home before it can be inspected or even entered.
Situations where someone passed away at home can require professional cleanup services, especially if the property has been unattended for a long time. This service is designed to handle biohazard materials safely and respectfully, which ensures relatives avoid the emotionally difficult task.
This is what needs to be addressed in priority before attention can turn to identifying who legally inherits the property.
What Happens If There Is No Will?
If the person who owned the property didn’t leave a will, the estate is handled under what is known as intestate succession. Intestate succession refers to the framework that determines who inherits assets in the absence of written instructions.
State laws establish a hierarchy for inheritance. This usually prioritizes close family members, like spouse, children, parents, and siblings.
If none of these relatives can be located or are alive, the search expands to more distant family members. That’s where unexpected inheritances can happen.
Can Close Relatives Refuse an Inheritance?
Sometimes, there are direct relatives who have been found and identified, but they have decided to reject the inheritance. Ultimately, inheriting a property is not mandatory. In the United States, heirs can choose to legally disclaim an inheritance, which means they decline to accept it.
Why would someone choose not to inherit? There can be many reasons:
- The property needs expensive repairs
- There are outstanding debts attached to it
- It is too far away
- They had a strained relationship with the late owner
- Etc.
In this case, the estate continues down the legal order of heirs, which is how a distant relative may inherit.
How Distant Relatives Are Found
When there are no immediate heirs, the court or the estate administrator may choose to hire experts, like professional genealogists or heir search firms. These experts are tasked to trace family trees and to locate anyone who may have a legal claim to the estate.
How do they find a family connection with someone you didn’t know?
- Through birth and death certificates
- Through marriage records
- Through census archives
- Through immigration documentation
- Through family records
This can be a lengthy process, but it is necessary to uncover distant relatives, including cousins, great-nieces and nephews, and even third cousins. It’s important to understand that the search may carry on until a distant relative is identified, if the estate administrator chooses to go down that path.
First Step: The Property Inspection
When you inherit a property, the most important thing you need to check is the condition. This is important because if you are a distant relative, it’s likely you know knowing about the home’s history, so you need to arrange the right inspections before you can make any decisions on the property.
This will reveal what you are dealing with. A full assessment can help uncover issues, so you have a better understanding of the condition the property is in. Typically, an inspection will highlight significant areas of concern, such as structural damage, electrical and plumbing systems, mold or water-related damages, an old roof, sinking foundations, etc.
Should You Renovate the Property?
Many inherited properties may need some level of renovation, even if it is minimal. The decision to renovate will depend on how extensive the repairs are expected to be and how much time and money you are ready to invest.
At this point, there is no right or wrong answer. It entirely depends on your budget and your purposes for the property.
Ultimately, renovation can increase the home’s value and make it suitable for long-term use. But it involve significant costs, both in time and in money.
For many families, the inherited home can be a secondary property, which can help make the renovation process a long-term DIY hobby.
Should You Sell the Property?
Swelling may be the most practical solution when renovation feels too overwhelming. You can choose to sell the home as is for cash or to a house flipping investor. These buyers are happy to consider property in less-than-ideal condition, which can help avoid the hassle of renovation works.
If you prefer sell on the traditional housing market, renovating first is the best way forward. This will definitely increase the final sale price; however, you may not recover what you invested in repair works.
Keeping the Property
Sometimes, you may decide to keep the property. Perhaps it’s an upgrade compared to your current home in the long term, in which case it would make sense to move in once the restoration work is completed.
Alternatively, you may decide to keep the property as a rental investment. As a rule of thumb, US landlords report a little over $16,000 in annual rental income per property, although after expenses, the remaining profit falls closer to $8,500 per year. This may keep the property worthwhile for some owners, or it may not be sufficient for others. Every family has its own priorities, so this one is for you to decide.
While discovering you have inherited a property from a relative you didn’t know can feel unexpected, but it is a situation that happens in real life. Whether you choose to keep it or not is up to you, but it can be an exciting adventure.
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