Inheriting a home can be a mixed blessing – especially if you didn’t know that someone planned to leave it to you. Even if you have no interest in living in it or using it as a rental property, however, you can always opt to sell it so that you have the proceeds.
But, if you accept this inheritance, you’re taking on a lot of responsibility. For example, you’ll be responsible for property taxes, any homeowners’ association (HOA) dues and mortgage payments (if it’s not yet paid off). You’ll also be responsible for keeping it secure – especially if it will be empty for a time.
What does it mean to “disclaim” an inheritance?
You can choose to decline or “disclaim” it. A disclaimed inheritance goes to the contingent beneficiary if there is one or back to the estate. It’s important to learn the requirements under Florida law for disclaiming property and for dealing with liens on inherited property.
Dealing with a lien if you decide to accept the inheritance
If there’s no mortgage on the home, that’s one less thing to worry about and to lessen the value of your inheritance. However, you may find that there are one or even multiple involuntary liens on the home. Liens are claims against a home. Unlike a mortgage, which is a voluntary lien, involuntary liens are generally placed by a court because the owner owes someone money. It could be for payment of a lawsuit judgment or settlement or for unpaid taxes or other debt. Typically, a lien remains attached to a property even when the owner dies.
If a lien is significant, you may have to sell the home and agree to pay the lien off with the proceeds as part of the transaction. However, selling a home with a lien can be a challenge. If the lien-related debt is small enough that you can pay it off, you may want to do that before you sell it, should you opt to get rid of the property.
This is a lot to think about. However, if you’re considering disclaiming an inherited home with a lien, you’ll need to decide what you want to do relatively quickly. You can’t generally live in or use the home (or any inherited asset) and then disclaim it. Getting experienced probate guidance as soon as possible is a good first step forward.