What to Expect as a Beneficiary of a Real Estate Will?
A beneficiary is a person or entity that receives personal property, cash, jewelry or other assets in a will. You may receive some land or property, a huge sum of money, or a specific item (for instance, jewelry).
Being designated as a beneficiary of a real estate will could present certain challenges and rewards. Except in cases where you are the surviving husband or wife where the legal transfer of the relevant property in your name will occur relatively seamlessly and quickly and without any tax penalties, you should know that receiving a real estate inheritance could be a complicated and long process.
It may take a few weeks or even a month for the courts and executor of the estate to divvy up the assets and property of the deceased, including the home. In most cases, the solicitor handling the case would get in touch with you if you are named as a beneficiary. Often you would receive a letter, indicating what the will mentions.
But, keep in mind that at this stage the beneficiary is not entitled to receive a copy of the will unless the executor of the estate gives you permission. An executor is an individual who is responsible for carrying out and implementing all the terms and conditions of the will (often a family member or friend chosen by the deceased).
The will is eventually filed in the Probate Office and becomes a public document which anyone can access. When ownership of the property has been transferred to you, the government might deduct state, federal, and local taxes from your estate in case its net taxable value is greater than a specific amount.
Also, inheritance tax is often imposed when assets are transferred at death, including real estate. The rate of tax depends on the nature of the relationship between the inheritor and the descendant. On the other hand, estate taxes are usually imposed on the property’s value at death. Keep in mind that currently, the federal government charges an estate tax for all estates with a value of more than $2 million dollars.
Moreover, in case you decide to sell your inherited house, it is likely that you will have to pay capital gains tax. The tax is applicable on the difference between the proceeds of the sale and the basis (the acquisition price including any improvements you make less depreciation).Presently, the capital gains tax imposed by the federal government is fifteen percent.
If the relevant property or house is your personal residence and you satisfy some specific guidelines, you may get an exemption from capital gains tax for the initial $250,000 if you are single or $500,000 if you are married.
Also, the property will have to be reinsured, because the ownership has changed. And in a majority of cases, there would be an assessment of the house for real-estate purposes, and it is likely that real-estate taxes on your property may go up.
Real estate inheritance is a complicated matter and may overwhelm you. You can make the process seamless and hassle-free by contacting Elite Ocean View Title Agency.