Dealing with the loss of a family member or dear friend is usually a very stressful and painful time that can become even more complicated by suddenly finding yourself dealing with an inheritance – a house, condo, car, art, family heirlooms, or even a garage full of knick-knacks. It may be challenging to know where to even focus – you likely think you have to do 10 things at once. To help you along, we’ve outlined five things to do immediately after inheriting a house in Hawaii
Lines of Communication
Communication truly is the key to success after inheriting a house in Hawaii, especially if there are multiple heirs that you need to work with — spouse in Hawaii, siblings in California, children spread apart the country — as well as with a probate attorney if required. Despite the modern conveniences like Zoom that can help reduce some of the friction of people being in multiple places, it is still common for multiple heirs to have differing opinions on what to do with a property: Keep it? Become landlords? Sell it?
Emotions, too, can affect how everyone communicates in these situations. It is crucial to keep the focus of these discussions on facts – try to prevent emotions from taking over and derailing the process. If you are aware in advance of conflicting dynamics, say between estranged siblings, or it becomes apparent that things are taking a turn for the worse, it may be worth hiring a mediator the help during negotiations. One heir can likely force the sale of the property through foreclosure. However, the profits from this approach could be far less than you’d get otherwise, usually perhaps around two-thirds of the fair market value (FMV).
When there are assets to be distributed, like a house or car, unless your loved one sets up a living trust and the acquisition was funded into the trust, you must file probate to be able to sell or otherwise transfer ownership of the house. Probate is the settling of the affairs of someone who died via the local courts. For probate to begin, the court must legally establish an executor or personal representative of the estate – this is usually a surviving spouse or elder/closest child. Firstly, there must be collecting and accounting of all the assets during the probate process and open communication with the beneficiaries (who’s getting the assets). Any claims from creditors must be satisfied along with the settlement of estate taxes if any – this usually involves public notices to creditors in the local newspaper like the Honolulu Star-Advertiser. The probate court must also resolve disputes between any heirs for the trust or estate and, finally, the assets distributed.
Being named an executor when you inherit a house in Hawaii is a big responsibility. You’re in charge of executing the entire plan as it’s legally laid out and making everyone happy – or as happy as possible given the constraints of the estate, housing market, etc. You will also need to develop the accounting methods for the trust or estate to be delivered when called for during probate.
As the executor, you will have to gather the assets and also establish a working relationship with the estate attorney, accountant, and other necessary professionals to complete the process – there are many professionals in Hawaii across all islands who are familiar with the probate and inheritance process. Be careful that you take every step possible to avoid mismanagement and follow all laws and not take any steps in your self-interest which could come back to haunt you, even years down the road. Your primary responsibility in this position is to act in the best interests of all involved and honor the will or trust, carefully adhering to the documents that are relevant and the intent of the deceased as outlined.
Inheriting a house isn’t always a good thing. You need to understand financially what’s involved when inheriting a house in Hawaii. In addition to paying the mortgage and insurance, you will need to account for any other debt associated with the property like tax liens, HELOCs, county violations, etc. Can you cover these for months or years on end?
You also need to speak with a CPA because the IRS charges taxes differently on capital gains than on other items – you need to explain the cost basis and other elements to them so they can inform you about your tax liabilities.
Additionally, the condition and age of the property matter as homes age, and repair expenses can really balloon. Do you have the funds for needed repairs now and into the future? If time or distance is at issue, you should also account for hiring caretakers or hiring a professional property management service if you choose to hold the property.
Hold or Sell
If you have decided against holding the property (and many do) – Oahu Home Buyers will pay a very good price and help you through the entire selling process after you inherit a house in Hawaii. Oahu Home Buyers understands that heirs sometimes need to respectfully move on with life not get caught up in the estate matters for months on end.
When you work with Oahu Home Buyers, you can be relieved of the burdens that otherwise come with the property. At Oahu Home Buyers, we take the time to explain every figure used to reach our offer and that you agree it is fair. Oahu Home Buyers uses straightforward contracts with no commissions or hidden fees because our goal is to make the process easy and efficient. Oahu Home Buyers will take care of everything, just leave whatever you do not want to keep in the home and walk away – yes, you can leave everything.
However you choose to proceed, Oahu Home Buyers we’re here to help. Oahu Home Buyers will answer any questions or concerns you may have with no obligation. There is nothing wrong with reaching out with questions if you feel overwhelmed. You will find dedicated experts willing to share their experience and help you along the way at Oahu Home Buyers. Just give Oahu Home Buyers a call at (808) 333-3677 or send us a message to learn how to solve your inheritance problems.