• What Do I Do Now That I Inherited A Property Radio Show with Brian Mudd

What Do I Do Now That I Inherited A Property?

This is the Treu Real Estate 911 Podcast with Lisa Treu. Lisa will share up to date real estate information with you that you need to know.

To listen to the show, click here. 

Brian Mudd:       

This is the Treu Real Estate 911 podcast, with Lisa Treu. Lisa will share up-to-date real estate information with you that you need to know. 

Welcome the Treu Real Estate 911. It's Brian Mudd, along with your local real estate pro, Lisa Treu. And on today's show, we're going to talk about something that is really important. We're going to talk about the law. We're going to talk about probate, and how transferring a property should be handled, and some of the pitfalls that you want to ensure that you avoid, not just for you, but for your family. So Lisa, they help you every step of the way at the Treu Group, so she's going to provide useful information for you to be able to consider to avoid some of these stressful situations. Now, before we get started, if you're not already there, go to treurealestate911.com. That's treurealestate911.com. It is the best local resource you're going to find for real estate. And if you're thinking about real estate, the Treus, they're always ready to help you. Seven days a week, reach out to them at (561) 972-8326. That's (561) 972-8326.

Lisa, before we get into today's show about probate, here we are, heading down the home stretch of June, kind of hard to believe, but what is the local real estate market like currently in the Palm Beaches?

Lisa Treu:

Well, we're seeing that there are still buyers that are wanting to get in this summer, looking to very purposefully find homes. We're seeing that the homes that have not sold, they're starting to reduce their prices in many cases, as they understand that it's kind of time to take advantage of that. And we're seeing still a lot of properties coming on the market that are just overpriced. And so there's some really great things going on in the market, and there's some big mistakes people are making in the market.

Brian Mudd:

One of the trends we'd seen in spring have been the resurgence of at least certain luxury properties, and they'd been at least performing better than they had in a while. Are we still seeing that?

Lisa Treu:

Yeah. I think we're seeing the properties that are priced well that have the right marketing and the right condition are still performing really well. And I think that we will see that continue as the northeast influence picks up for South Florida, because they are expecting, listen to these numbers, in New York, 800,000 to leave the state of New York. Now, that's just New York. Imagine New Jersey, Connecticut, Massachusetts, all those other states, Illinois, that have high taxes, looking for a place to come where it's better financially for them. And yet people will hear that and say, "Well, there's going to be more people that want to buy my home than there's going to be inventory, so I can ask anything I want." Well, of course not.

So wealthy people did not become wealthy by just

Brian Mudd:

Throwing away money?

Lisa Treu:

... throwing away money, right? And if you're getting a mortgage, the banks want to make sure, especially in an appreciating market that we're definitely in, that their money is protected and safe and that they're not doing stupid loans out there right now.

Brian Mudd:

Okay. So that's all good information, and again, if you have other questions about local real estate, Treu's ready to help you. (561) 972-8326.

Now, you wanted to talk about probate on today's show, and you had mentioned that you're increasingly seeing some issues that have come about. This is definitely something that I think is off the radar until it's a problem for the average homeowner, so if you'll kind of walk us through the concerns that we should be mindful of so we avoid some of these pitfalls.

Lisa Treu:

Well, I think with probate, it first starts with having a plan, and so when does a property need to go through probate. There's a lot of confusion by I think most people about what happens. So when somebody dies with a will, the personal representative that's named then needs to file for probate. Now, this can be done by the person. You can hire an attorney. It's great to get good legal advice, especially in the case of making sure everything's done right, but you're going to need certain documents.

Now, there are certain things that don't have to go through probate, which is great. One is properties or assets in a trust. And so my first comment is that, "Get some good tax planning." Are you better off putting your properties in a trust, and we have some great resources of people that understand how to protect your assets not only when you're alive, but upon your death. And so that's number one. And then things like IRAs and life insurance, pensions and all that, those also do not have to go through probate. And then the last thing is anything owned in joined tenancy, or if a spouse owns a property and the other spouse passes away. So probate is not always required, but when it is required, it's important that it gets done timely and done properly.

And the other thing I think you can do for your loved ones is having things organized, because one of the things I find is that it's already a challenging time, because most of the time your personal representative is a family member. Not always, but most of the time, they are. So they're dealing with the emotional challenge of the loss, and now they're having to go and hunt for documents. So having everything organized and filed for them so that they're not having to go and search for something that they need ... First of all, your will. Where's your will at? Do they know that? Do they know where your bank accounts are? Do they know what liabilities you have? Having all that information in an orderly fashion I think is a definite gift to your loved ones out there.

Brian Mudd:

No question. I recall someone who actually was a colleague, he's retired now, but when he had been working here, he ended up losing a family member, and it took them over a year to get all the answers that you're talking about. And if you just plan ahead of time, obviously you can avoid almost all of that. And you talked about the difference between a will and ultimately a trust, and a living revocable trust is one that's popular. Yes, it's a bit more to set up, but as you point out, it's definitely going to be the easiest on the transferring of assets. Is that something that increasingly you've seen more people include in their plans?

Lisa Treu:

You know, I think that there are a lot of people that are looking at setting it up to minimize taxes, and also ease. Because if it's something you can minimize the impact for your loved ones to have to go through an additional process, then that's also a big plus, and I think people minimize that benefit of the trust, so I do think that people are starting to look at it. And yes, it's a little bit more work and it's a little bit more expense, and yet if you have the assets, most people feel that it does make financial sense to look into a trust.

Brian Mudd:

The other concern is if it's going to take a while. Now you have a property, and it's sitting there, and that could end up leading to all kinds of issues. Do you run across situations where there is a problem with upkeep, or maybe even taxes?

Lisa Treu:

You know, it's very interesting, because there's really I think five challenges that people go through, and one of the things that they go through is dealing with it when they're not here, and so they don't even know where to start. So often even they delay starting the process as far as starting to prepare the home, cleaning out the home, figuring out who's getting what, all of that, because it is so emotionally draining at times.

Brian Mudd:

Well, and if you think about it, I mean, to your point, you lose a loved one and you're out of the area, the first week is nothing but simply dealing with the reality in front of you, the next week, the beginning of the transition. Somebody's out of the area, it's likely that it's weeks before they even go, "Okay, now, what's the situation with the home?"

Lisa Treu:

We have a lot clients that call us, and they find us off of our reviews online many times, and they call us and they're like, "We're in another state," which happens all time, "We're still working. We're trying to figure out how to squeeze this into our life." Maybe they still have children at home and they're trying to figure out how to come and clean out the property. And we start with, "What is in the property that's important to you, that you want, you want to retain?" Sometimes there's certain pieces. "Great. How can we help facilitate getting those to you?" And maybe they need to come down and see what there is.

But we're really being very hands-on in helping them even with the clean-out of the property, the things they don't want, because they say, "Oh, I'll just call a charity." It's not that simple anymore. The charities are getting more particular about what they're taking, and they're not coming Tuesday at 9:00, right? And so you may be back home and the house is still full. And so we are helping meet the appropriate people, make the donations that need to be made, even getting rid of the things that just need to go. And so handling all those details is really important.

What I would say is if you don't know where to start, just call us, and we'll help you put the plan together. "Okay, where are you? Have you filed?" I mean, the first thing is you need to file the right legal paperwork. "Have you done that? Great." Now, we're not attorneys and we're not tax accountants nor attorneys. We do have that specialize in these. We have probate attorneys. If you say, "Look, I don't know what I'm doing, nor do I want to learn how to do this," we'll give you somebody who's trustworthy that can handle it for you.

If you are saying, "How do I do some tax planning," we've got some great recommendations of people that will help you structure it in a way that will maybe even have to avoid probate altogether. And then if you just say, "I'm already in this situation. Nobody wants the property. We need to sell it," okay, we can help you with that. But maybe there's repairs that need to be done. We have all those resources.

And many of our clients that we've helped in this situation, we've actually never met. We've been able to handle everything for them, and they've been able to stay and continue their life, and honestly, doing the important things, which is dealing with the loss, and not worrying about, "Okay, how are we going to empty this property out?"

Brian Mudd:

I've heard of families that have decided to go ahead and transfer assets to other family members while they're still living, to try to avoid some of this. Is that something that you've seen be an effective strategy?

Lisa Treu:

I've seen it done properly and I've seen it done very, very wrong. And so my advice is if you're going to do that, you need to get great legal counsel, somebody who is a specialist in that area. It's like if I'm having a heart problem, I'm not going to go see my podiatrist, right?

Brian Mudd:

Hopefully not.

Lisa Treu:

Yes. You need a specialist that actually, this is what they do, so that they structure it the right way and you're not finding out, "Wow, everything we did was not proper and we still have to go through all these channels."

The other thing that's very challenging is sometimes with probate there's ownership, and we've seen this a few times, where there's ownership where the probate wasn't quite done right and now all of a sudden somebody pops up and you're ready to close.

Brian Mudd:

Oh, boy.

Lisa Treu:

You don't want that to happen. You want to make sure that everything's been done properly, and that's where getting maybe a probate attorney would be helpful, versus somebody trying to figure this out, because honestly, we're probably only going to do this one time in our life, right? We're probably only going to be the personal representative one time, maybe two times, in our life. So we're not going to be experts at it by any means. And if you don't do everything right, you can have a mistake which could cost you a sale.

Brian Mudd:

How often is it that all the family members that might have some kind of a stake are necessarily on the same page? Because you just reminded me of a situation where even if someone was the executor of a will, for example, went through probate, but then there was a dispute about the proceeds of that sale and that ended up becoming an issue.

Lisa Treu:

Yeah. Conflict is one of the biggest challenges. And we always have that conversation right up front, as, "Who are the heirs, and does everybody feel the same way about the process?" And many times, we are kind of the person going in between all the family.

Brian Mudd:

Lucky you.

Lisa Treu:

Yeah. Often, probate has similar issues to a bad divorce. And the emotions heighten it, right? They're dealing with the loss of a loved one, and now everything feels bigger than what it really is. And so if we have that conflict, the best thing we can do is kind of come alongside each family member and hopefully be able to get everybody to understand that we all have one goal, which is to get the property sold for the most money possible, and that benefits all the heirs, not just one particular heir. But conflict is, I would say a consistent ... I'd say 50% of probate situations have some level of conflict. And once again, a lot of it is just because, understandably, the emotions are heightened.

Brian Mudd:

For the majority of people that are out of the area, you're likely talking about people who had been retired here for some time, and I would imagine that every now and then you'd run into situations, too, to where within that conflict you'd have certain family members who might want to use that home as a vacation property, others that do want to sell it. How difficult can it be to work through those types of issues, as well?

Lisa Treu:

When there's conflict ... because 50% of the time everybody's on the same page. Nobody wants to come to Florida and use it enough to make financial sense to keep it. And then you have to say, "Okay, what are the rights of all the parties," right? One wants to keep it, one wants their share out of it, just like, honestly, a divorce, right?

Brian Mudd:

Yeah.

Lisa Treu:

There's usually one who wants to keep the house and one that doesn't want to. And so it's just having those honest conversations and asking the right questions, and then referring back. I mean, obviously the personal representative was named for a reason, and just encouraging cooperation, because a lack of cooperation costs money. And it doesn't cost one person money; it costs everybody money. But I think having those conversations up front is key, because we need to know what we're walking into.

And we've had great success with being able to not mediate but just be the voice of reason to all the parties. And sometimes it's not what's being said; it's how it's heard. And so if we can have those conversations instead of somebody saying, "Well, I'm the personal representative and what I say goes," that may not get as good of results as if somebody's sharing the whole picture and helping them trying to come to some sort of reasonable- 

Brian Mudd:

Stands to reason. And over the years, I know you've seen it all and worked through it all. And again, the Treus can help you in any of these types of situations. So if you're looking for guidance, if you're looking for advice, the resources that they recommend, as well, if you're looking to making some of these decisions, Treu's ready to help you. Reach out to them at (561) 972-8326. And of course, if you're buying, selling, questions, Treu's always able to help you. (561) 972-8326, or you always, always, can check out truerealestate911.com. Go there if you're not already there. You'll find a lot of other helpful resources that you might want to consider for any type of real estate situation. So again, treurealestate911.com.