From Grief to Guidance: Managing Inherited Property

Ralph Estep Jr. [00:00]

Have you recently inherited a house after the passing of a loved one? Are you feeling a bit overwhelmed and unsure about what to do next? Well, join us today as we navigate this complex situation together, seeking wisdom from Scripture and practical guidance to help you make the best decisions moving forward.

Ralph Estep Jr. [00:22]

Welcome to our Motivational Monday show. I'm so glad you chose to join us. I just want to thank you for listening and, more importantly, supporting the program. I'm coming to you from the Estep farm in this beautiful Saggio Accounting Studio today. Let me put on my podcaster hat, put down those overalls, and push out adding the machine to the side. Let's get into some financial wisdom from a Christian perspective.

Ralph Estep Jr. [00:45]

Today, we're tackling a heavy but important topic: What do you do when you inherit a house after losing a loved one? I know this is a reality many of you have faced or will face. It can be an emotional and confusing time as you grieve and try to make big decisions. But don't forget to subscribe to the show and join our email list. You can do that at askralphpodcast.com so you don't miss tomorrow's show.

Ralph Estep Jr. [01:08]

Tomorrow, we're going to have an interesting show. We're going to talk about the implications of being an online influencer. This is a question posed by one of our loyal listeners, whose daughter has become an influencer. She wants to know the tax and other implications of that decision. Since we're going to cover it tomorrow, you don't want to miss tomorrow's show.

Ralph Estep Jr. [01:26]

We also just launched an insider’s group on Facebook, and I encourage each of our listeners to join the group to continue the conversation from the show. It's a great place to share ideas for the show, discuss your triumphs and also discuss your challenges. I'll have a link to the Facebook group in the show notes.

Ralph Estep Jr. [01:42]

As we dive in, I want to anchor us with a verse from Proverbs chapter 15, verse 22, that says this, “Without counsel, plans fail. But with many advisors, they succeed.” I truly believe God gave us community and wise counsel to help us navigate life's most difficult moments. So, as we discussed this today, I encourage you to lean on your faith community, seek wisdom from trusted advisors, and, most importantly, seek God's guidance every step of the way.

Ralph Estep Jr. [02:11]

Before we get into practical steps, I want to first acknowledge the emotional weight of this situation. Losing a parent or loved one is one of the hardest things we do in our lives. If it's fresh for you, I'm so sorry for your loss. I just lost my mom a little more than a year ago, and I truly understand the emotions you're going through. And I pray for your peace in this process. Please prioritize taking care of yourself and allowing yourself to grieve.

Ralph Estep Jr. [02:37]

The truth is, folks, the house can wait as you process your emotions. At first, the thought of dealing with the house on top of your grief may feel totally overwhelming. But take it one step at a time, surrounding yourself with loved ones. Leaning on your faith will help get you through. I hope to provide some of that support for you today. So that's the whole goal of today's show: to give you some support in dealing with this difficult topic.

Ralph Estep Jr. [03:01]

So you've inherited a house. What do I do now, Ralph? Well, the first practical step is to secure the property. Seems like a no-brainer, but this is really important. Locate all the keys, change the locks if needed, and make sure the house is safe from the elements and potential break-ins. If it's vacant, consider notifying the local police department so they can keep an eye on it. You might also want to consider putting an alarm system in or some even temporary cameras.

Ralph Estep Jr. [03:25]

Next, you want to get the mortgage and utilities transferred to your name and alert unnecessary entities of your loved one's passing. These will include the post office and subscription services, their employer, and so on. Tracking down all the documents you need, like the will, mortgage statements, insurance policy, and so on, can feel like a scavenger hunt.

Ralph Estep Jr. [03:46]

Here's where you don't want to be afraid to ask for help and take it one thing at a time. Once you have the immediate needs sorted, it's time to start considering your options for the house itself. Depending on your situation, you have three main paths. These are the three that I think are most relevant: You can move into the house yourself, rent it out, or sell it.

Ralph Estep Jr. [04:08]

If you're considering moving in, you kind of really take time to think and pray about if this is the right move for you and your family. Is it in a location that makes sense for your life and work? Does it fit your family's needs in terms of size and accessibility? Would it be healthy for you emotionally to live in your loved one's former home? That's a tough one. There's no right or wrong answer to this, but it's important to go through it with eyes wide open. If you already have a home or it doesn't make sense to move, you might consider renting the property.

Ralph Estep Jr. [04:37]

If you are considering renting, I would strongly encourage you to go back to listen to our past episode about being a landlord. You'll find out right on the podcast site. That's at askralphpodcast.com. If you do choose to rent a home, this can provide a steady source of income, but it also comes with the responsibilities of being a landlord, and that's not something everybody wants to do.

Ralph Estep Jr. [04:57]

I tell clients all the time you have to have the right stomach for that. You'll need to ensure the house is up to code, then have to find reliable tenants and be on call for repairs in emergencies. Of course, you could also hire a management company to do that. But if you don't have the bandwidth to do this yourself, you could hire a property management company like I just said, but that will eat into your profits you're generally charged about 10% for what they do.

Ralph Estep Jr. [05:21]

So this is a time to pray for discernment on whether being a landlord is something God is calling you to do in this difficult time of grieving in this season that you're going through. For many people, selling is the most attractive and practical option. It provides immediate funds you can use to cover costs or invest without the long-term responsibilities of upkeep and those thoughts of having tenants.

Ralph Estep Jr. [05:43]

But rushing to sell it is not always the best choice either. You want to consider the current market conditions and any capital gain taxes you might face. Speaking of taxes, this is where expert advice is critical. The tax implications of inheriting a house can be complex. In the US, you generally get what's called a stepped-up basis when you inherit a home, meaning you inherited it to fair market value at the time of your loved ones passing, not what they originally paid for it. So, if you sell shortly after inheriting, you might have little to no capital gains tax.

Ralph Estep Jr. [06:14]

But if you live in a house for a while before selling it or you rent it out and then sell it later, the capital gains taxes can be significant. That's why I recommend you consult with a tax professional financial advisor to understand the nuances of your specific situation.

Ralph Estep Jr. [06:31]

The last thing you want is a giant unexpected tax bill down the road. While we're here, I'll remind you if you want to schedule a consultation with me just go to askralphpodcast.com/store. And you could schedule a Zoom conference and we can discuss your specific situation so that I can give you the guidance you need for what best suits you.

Ralph Estep Jr. [06:49]

Beyond logistics and taxes, there are emotional factors the way too. Like I said, you just lost a loved one. Was this a beloved family homestead with cherished memories? Does selling feel like letting go of your family's legacy or, conversely? Would holding on to the property keep you mirrored in the pain of your loved one’s passing? These are different for everybody. Examining your emotional attachments as well as practical considerations can help you make the most prudent and pieced-filled choice, and that's what it needs to be.

Ralph Estep Jr. [07:19]

Another key consideration, is any other family members who may have a stake or opinion on what happens to the house. If you have siblings or other relatives who are beneficiaries, it's crucial to keep lines of communication open, even if you're the executor or the primary decision-maker. Money and estates can cause deep rifts in families if they're not handled with transparency, empathy, and grace. And trust me, I've seen death, and this brings out the ugly in people.

Ralph Estep Jr. [07:47]

In fact, I will be doing a show in the next few weeks about what to do when you inherit property with someone else and how to navigate that process. Unfortunately, I have seen this turn into a horror story. But at this point, I'd recommend grounding your conversations in love and respect while also being clear about the financial and legal realities. You could consider bringing in a neutral third party, like a mediator or a counselor, if discussions get heated or emotionally charged.

Ralph Estep Jr. [08:13]

Unfortunately, I've seen that, but most of all, anchor yourself in prayer and the wisdom of Scripture like the book of Colossians chapter 3, verses 13 and 14, say this: “Bear with each other and forgive one another if any of you has a grievance against someone. Forgive as the Lord forgave you. And over all these virtues, put on love which binds them all together in perfect unity.” I didn't write the scriptures, but boy, that just nails it, doesn't it?

Ralph Estep Jr. [08:40]

“Bear with each other and forgive one another if any of you has a grievance against someone, forgive as the Lord forgave you. And over all these virtues, put on love. And that binds them all together in perfect unity.” For example, when one of my recent clients inherited their grandfather's house, they had to have some tough conversations with their sister. She had dreamed of moving her family there, but the relocation didn't just work for them in reality. Meanwhile, my client felt a strong calling to carry on his granddad's legacy by keeping the property in the family. They had some tense moments trying to sort it out.

Ralph Estep Jr. [09:15]

By really listening to each other, getting wise counsel and bathing the whole process and prayer, they came to a peaceful resolution. In the end, he took over the farmhouse, and with the proceeds from the land sold, he helped his sister's family with a down payment on a house in a city that was a much better fit for them. So we're able to work through it together. It wasn't always easy. He told me that God was faithful in giving them unity as they looked to him, which brings me to the next point.

Ralph Estep Jr. [09:42]

In the midst of dealing with the practical aspects of an inherited house, don't neglect your spiritual and self-care needs. I see so many people get mired in all these decisions that they forget about their spiritual and self-care needs. Try not to make big decisions while grieving because that can be a recipe for burnout. Be intentional about creating space to process your emotions, connect with loved ones, and, most importantly, and I can't stress this enough, connect with God.

Ralph Estep Jr. [10:09]

For my client taking daily prayer walks, his grandfather's land became a lifeline. It was a time to remember him, pour out his heart to God, and find peace and clarity for the path ahead. You've got to find those lifelines for yourself, whether it's journaling, counseling, or even coffee with a dear friend, and hold on to them. They'll provide stability and strength as you navigate this unknown terrain. There are people around you that are willing to help you.

Ralph Estep Jr. [10:37]

And finally, once you've made your decision about the house, be sure to surround yourself with experts to help execute the details. If you're selling the house, interview several realtors to find one who is a good fit. Ask for referrals to reputable contractors and appraisers. And don't forget the importance of decluttering and staging the house to appeal to potential buyers.

Ralph Estep Jr. [10:56]

If you're reading, invest in a rock-solid lease agreement, do thorough tenant background checks, and familiarize yourself with landlord-tenant laws in your particular area. It's a great time to vet potential property managers carefully, look for their experience, and look at their integrity. Also, and this is a big one, make sure they have great communication skills. I don't know how many times I've had clients who had property managers who just failed to communicate with them.

Ralph Estep Jr. [11:21]

Whichever path you choose, there will be bumps and curveballs along the way. Remember to give yourself grace, trust in God's providence, and lean on your community of support. As King Solomon wrote in Ecclesiastes, chapter 4, verse 12, “The one may be overpowered, two can defend themselves. A quarter of three strands is not quickly broken.” You are not alone in this.

Ralph Estep Jr. [11:48]

So, in summary, if you've inherited a house, here are some things you got to remember. Number one, secure the property and get the affairs in order. Number two, consider your options. We talked about whether you want to sell it, rent it, or move yourself. Number three, seek expert advice, especially on taxes and legal matters. You don't want to try to navigate out on your own. Number four, take your time with decisions. But don't let the property sit unattended for too long, as it could fall into disrepair or be vulnerable to theft or vandalism. You have to prioritize securing and maintaining the property while you weigh your options. Number five, if there are multiple heirs, communication and compromise are the keys to getting through this. Consider putting agreements in writing, such as a fair settlement agreement, to ensure everyone's on the same page and help minimize conflicts. An estate attorney can help with this process. Number six, beware of any debts or liabilities attached to the property, such as a reverse mortgage, isn't one you're going to be on the lookout for.

Ralph Estep Jr. [12:47]

How about unpaid taxes or HOA fees? You'll need to factor all of those into your financial calculations and, ultimately, your ultimate decision number seven. If you decide to keep the house, think long-term about fitting it into your overall financial plan and estate. For example, a financial advisor can help you explore using the houses or rental property inside an LLC to potentially limit your liability. Number eight, don't forget the sentimental value of your loved one's belongings. You take time to distribute mementos among the family before clearing anything out for sale. Consider taking photos or a video tour of the house to preserve memories. Number nine. Finally, find ways to honor your loved one's legacy in whatever way feels meaningful to you. Maybe it's planning on a Memorial Garden on the property, establishing a scholarship in their name with some of the proceeds, or hosting an annual family gathering at their homestead.

Ralph Estep Jr. [13:39]

Focusing on the love you share can bring healing and new purpose to this new chapter in your life. I hope these additional insights are helpful as you navigate this complex situation. Remember, there is no right answer. The most important thing is to make the wisest choice for your unique circumstances while treating yourself and others with grace and compassion along the way.

Ralph Estep Jr. [14:00]

So, I wish you clarity and peace as you discern your next steps. Please share this episode with anyone you know who may be in a situation so they have some concrete tools to assist them in the process as well. And as I always say, stay financially savvy, my friends. If you've just lost somebody, I am deeply sorry for your loss. I pray for your peace. And may God bless you today.