You've inherited a house: Now what?
It would seem that inheriting a house, especially
one filled with good memories, would be an unqualified blessing.
But inheriting the family homestead and deciding what
to do with it also can stir up all sorts of emotions, including
unpleasant ones, and strain family relationships.
Before the all-too-common family wars break out in
earnest, you'll want to calmly and (at least somewhat) rationally
think through your options. If there is more than one heir, you'll
also need to discuss the situation with the others, keeping in mind
that everyone is likely to have different views on just how to proceed.
Before making any major decisions, first deal with
any emotions you (and any other heirs) might have about it. "Emotion
can be a liability," says Kay Shirley, a CFP and president
of Financial Development Corporation in Atlanta, Ga.
Put emotions aside
The early inclination is to hang onto a home because you (and
possibly your siblings) are attached to it. That thinking can backfire.
"The good times can quickly be overcome by the
bad," says Robert Weagley, a CFP and associate professor
of consumer and family economics with the University of Missouri
in Columbia. "Let it be a financial decision, as much as possible,"
For one thing, it can be easy to assume incorrectly
that others share your emotional attachment. Realistically, some
will feel strongly about keeping it, others will want to sell it
and still others simply won't care.
Finances often come into the picture. Let's say the
children who want to sell the old family lake home may reason that
they're not going to use the home much anyway, and would like money
from a sale to boost their kids' college funds. The siblings who
want to keep the house may live closer to it, and be able to visit
Ultimately you should ask yourself how you would proceed
if you had no previous connection to this piece of property. Think
of it as an investment property. Would you keep it, sell it, rent
it, renovate it or combine these options? Even if emotions enter
into your final decision, at least you'll recognize the role they're
To decide on a course of action, first assess the
overall estate. It may be necessary, for example, to sell the house
in order to settle outstanding medical bills.
Also consider the location of the house. If you live
far from the property, moving into it or managing it as a rental
property may be out of the question.
The condition is also a factor. If it's in disrepair
or looks dated, you'll have to determine the amount of time and
money you would need to invest so that it could either be inhabited
or sold. Then, you'll need to decide what level of investment would
Whether you keep or sell the property, you may need to spruce
it up. Tackle the easy tasks first, such as removing clutter, trimming
the shrubs and repainting walls that need it. These improvements
cost little, but can boost the value of the house in the eyes of
Then, you'll want to think through any plans to do
more. Hire a competent inspector who can evaluate the shape of the
structure itself, as well as of the electrical and plumbing systems.
This will help you put a cost figure on any renovation. In addition,
disclosure laws in many communities require you to let buyers know
of any defects.