OTHER TAX
Heirs may have to pay property taxes as soon as they inherit real estate, and they will continue to pay them for as long as they own the house. Many states cap how much the assessed property value can rise from year to year; however, when someone buys or inherits real estate, it will be reassessed at current market value. Even if subsequent assessments are capped, the initial reassessment can result in heirs paying thousands of dollars more in taxes than the previous owner. Some states offer an exemption. Check to see what your state does. They say where there is a will, there is a way. And, if the will names you as the sole or partial beneficiary of a home upon the death of a relative or friend, you will need to adequately prepare for the financial and personal ramifications. Being named as a beneficiary of the real estate in a will can present challenges as well as rewards. Unless you are the surviving spouse, in which case legal transfer of the property to you should occur relatively quickly, seamlessly and without tax penalties, receiving an inheritance can be a long and complicated process. It could take several weeks for the executor of the estate and the courts to divide the deceased’s assets and property, including the home. Once ownership of the home is transferred to you, the government may deduct federal, state, and/or local taxes from the estate if its taxable net worth is more than a certain amount. Inheritance tax is imposed on the transfer of assets, including real estate, at death. The rate depends on the relationship between the descendant and the inheritor.
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