Property Transfer: What to Do When a Relative Has Put You in Their Will

Image Source: Media.Defense Being named as the beneficiary of valuable property in a will may sound great, but it can lead to problems. For the surviving spouse of the deceased, it's a pretty seamless transfer, and there's no tax penalty. For anyone else, though, it can be a complex matter that drags out for weeks

Probate Court

An executor, such as an attorney from Leon J Teichner & Associates, PC, will file the will with the local probate court. If a judge declares the will valid, assets are distributed according to the deceased's wishes. If it's considered invalid, the court will hear claims and oversee distribution of assets. Even if it is valid, someone may contest the terms of the will if they feel the deceased was under someone else's influence, not of sound mind, or the will was not properly signed.

Taxes

Once ownership of any property is legally transferred, the federal government and six states will collect an inheritance tax based on a percentage of the total estate value. If that value exceeds $5.49 million, Uncle Sam also wants an estate tax. Two states, New Jersey and Maryland, will also levy the estate tax in addition to the inheritance tax. The estate tax is charged against the entire estate. So depending on location and value, inheritors could wind up paying twice on both the state and local level.

Disposing of the Property

Estate taxes are due within nine months. Many people are tempted to simply sell off inherited property as a way to pay off these taxes and hopefully retain some profit. Unfortunately, there is also such a thing as capital-gains tax. That's charged against any difference between the sale price and the fair market value at the time the estate holder died. If its real estate and the beneficiary chooses to live there, they may be exempt up to a certain amount.

Other Concerns

The inheritors may also have to worry about mortgages or other legal liens against property. Litigation from people who sue for money they feel they're owed is not dismissed at the owner's death, but passed on to the estate. There is also the issue of partial ownership. For instance if two sisters are left equal shares in a tract of land, they may need surveys and appraisals done to establish what that half-value is. Inheritance is a complex issue that often requires the help of experienced individuals and a lot of thinking and planning. Hopefully, the above advice will be able to help you take action if you have been left something in someone’s will.