Frequently, the family home is one of the most sizeable assets an individual or couple owns. As such, many Arizona families leave this valuable asset to their child or children. While this is certainly a typical way to pass down an asset in the family, it is worthwhile to consider for planners ad beneficiaries alike to consider cost of repairs to the house, the desire of the child to inherit the house, and any other legal and financial considerations related to the estate administration.
Taxes are one of the most significant issues that can accompany the inheritance of a property. Federally, properties passed down at the time of death do not have taxes levied on the home’s appreciation value. This is a capital gains tax break, and can be a positive for those inheriting property. On the other hand, state taxes need to be considered and the costs involved in maintaining and/or selling the house are still important to think about.
Repairs are an obvious place where costs can exist, especially if resale value will go up significantly if repairs are done. Mortgages or debts against the house must also be considered. Finally, property maintenance is another cost, especially if the person inheriting does not plan to inhabit the house. When there is more than one beneficiary splitting a single property, for example multiple children with equal shares in the estate, this can add complexity as individuals may disagree on these decisions.
Understanding the actual value of the property, and what costs may be associated, is critical when managing estate administration. An agreement on these details among all parties is an added necessity when multiple beneficiaries are involved. Working with a Florida estate planning and administration attorney can help to clarify these important details for the benefit of all involved.