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What Happens When You Inherit a House with No Mortgage in Massachusetts?

When you inherit a house in Massachusetts that has no remaining mortgage to be paid off, there are still some steps to take before you can call it your own. If you’re going to keep the property, you’ll need to find a way to pay for upkeep and taxes on the property. But, if you’re not interested in keeping it, you have few other options to choose from: you may opt toward simply selling the home through an estate sale or contact one of the many investors who buy houses without mortgages. Or if you’re looking to get the most bang for your buck out of the property, you can always invest in flipping the property and selling it for top dollar a little later down the line. However you choose to proceed with the property, it’s first important that you fully understand how inheritance works for homes in Massachusetts. We’ve broken down some key takeaways for you in this article:

The Probate Process in Massachusetts

If someone dies without a will or they left their property to heirs but didn’t specify how they should be distributed among them, then the probate court will be responsible for making the final call. Probate is the process where your estate’s assets are administered by a court-appointed executor. Even with no mortgage to be paid off, if it so happens that the deceased person left behind any debt or unpaid taxes before they passed away, those debts will first have to be taken care of before the property can be transferred to you as the new owner. You’ll likely need to go through the probate process anyway in order to transfer the property title into your name. There are two primary types of probate the Massachusetts inheritances laws most commonly abide by:

  1. Formal Probate: Involves filing an application for a probate court hearing, which can take about a month to finalize. Formal probate is typical in inheritance cases that lack an original or verifiable will, or if there is disagreement between multiple heirs.
  2. Informal Probate: As the most cost-effective and timely form of probate, the inherited property is probated through an application process, which can be finalized within a matter of days, with little to no court involvement. Informal probate is typical in inheritance cases where an original, verifiable will is present and there is only a single heir or no disagreements between multiple heirs.

Inheritance in real estate largely depends on your relation to the deceased. When it comes to inherited property that is not subject to any mortgage payments, there is typically an equitable distribution process that takes place.

Tax Implications on Inherited Property

Are you wondering what taxes are involved when inheriting a house with no mortgage in Massachusetts? According to state provisions, if the estate you’ve inherited is estimated to be worth more than $1,000,000, you’ll likely need to file an estate tax return. It’s pertinent to note that this estate tax is not simply capped at the amount above exemption, so say if the estate you’ve been handed down is worth $3,000,000, the Massachusetts estate tax applies to that collective three million.

In Massachusetts, if you inherit a house with no mortgage and want to transfer the house to your name for free by making an “actual” gift to your children or spouse, there is no tax consequence. However, if you want to sell the house but take back some money as part of the deal so that they do not owe any capital gains on their inheritance, be sure to consult with an accountant before taking any steps forward. This way you can avoid inadvertently creating taxable income for them which could result in higher taxes owed later.

Say you decide not to hold onto the home, but instead sell it for top dollar –either as-is or after making some renovations–then you’ll also have to pay inheritance taxes on any profits made from investment income or capital gains. If you have questions about how this applies to your specific situation or would like more information on other taxes that may apply, give us a call today at (781)-309-7085!

Should You Keep Your Inherited House or Sell As-Is?

Inheriting a house comes with its own unique set of challenges. The most difficult decision you’ll have to make is whether or not it makes more sense for your family situation to keep the property and rent it out, continue living in the home, or sell the house outright so that you can use the money from selling as an investment elsewhere.

  • Keeping the Inherited Property

Consider what you’ll be using the house for if you keep it–Will your family move in? Will you tear down the existing estate and rebuild? Will you opt to transform it into an investment property and rent it out? Your long-term plan for keeping an inherited property will ultimately help you decide what rehab work needs to be done if you don’t plan on using the house as is. More often than not, inherited properties have more infrastructural issues than what meets the eye, especially if the property formerly belonged to an older individual who couldn’t keep up with intensive maintenance. Be sure you have the financial flexibility to take care of repairs large and small if you’re thinking about keeping the property.

  • Selling the Inherited Property

Regardless of whether you decide to sell as-is or put a little elbow grease into the property before the selling process, we’ll make the sales process as easy and painless as possible. No agent fees, brokerage charges, hidden costs, etc. Given that there is no mortgage owed on the property, most of what you receive by selling the inherited home as-is will be directly profitable to you. Selling as-is is also your best bet if you’re looking for a rapid sale and quick cash. When you’re ready to get that inherited property off your plate, give us a call and we’ll send one of our expert appraisers to evaluate the home and give you a fair offer based on the current market and sales in the surrounding area. No obligations, dispatch fees, or strings attached.

At Pavel Buys Houses, we offer fast cash offers for inherited single family homes and condos throughout Massachusetts area every day, so allow us to help make this decision easier on you too and help create a solution that works best for your situation! Ready? Contact us today or give us a call at (781)-309-7085 and see how we can help turn your inheritance into liquid assets that work for YOU!

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