The great wealth transfer of trillions of dollars in assets - approximately $72.6 trillion over the next 20 years - has begun.
Among those assets are inherited properties, but it's tough to deal with the baggage that comes with an inherited house.
Pam Krueger from Wealthramp (wealthramp.com/) is back to go over essential questions to ask when you inherit a house.
You can download the episode wherever you get your podcasts:
• Listen on Apple Podcasts (podcasts.apple...)
• Listen on KZitem Music (music.youtube....) (formerly Google Podcasts)
• Listen on Spotify (open.spotify.c...)
Don't forget to check out our podcast page (www.moneytalks...) for more episodes designed to help you make the most of your money.
Getting ready to inherit a house
It's not unusual to consider a home as part of an inheritance (www.moneytalks...) . However, if you're on the receiving end of that inheritance, you might not be sure what to do.
Pam points out that any type of inheritance can be emotional and lead to difficult conversations. If you need help talking to your parents, we have a podcast episode about how to talk to your aging parents about money (www.moneytalks...) .
When you decide to talk about inheriting a house with your parents and siblings, it might also be a good idea to bring in a financial planning professional (www.moneytalks...) or estate planner. Getting everyone together so you're all on the same page can reduce the stress involved later.
How to deal with an inherited house
As you review the inheritance, there are some important questions to ask, and plenty of pitfalls to avoid. Some of the most important things to address include:
• Is there a reverse mortgage (www.moneytalks...) on the home? Once your parents pass, a reverse mortgage can potentially put some limitations on your ability to keep the home in the family. Miranda shares a story of a friend who had no idea there was a reverse mortgage on an inherited house and is dealing with the fallout.
• Do you understand the capital gains? Pam talks about stepped-up basis for capital gains taxes on an inherited house. The good news is that you'll be protected from some of the tax consequences of inheriting (www.moneytalks...) .
• Should you buyout the home? Talk to your siblings about a buyout if you want to be able to do what you want with the inherited house.
• How do you split the proceeds? If you're sharing, you need to know how to split the proceeds-after the estate pays out for taxes and upkeep and other expenses.
• What's the family situation? Be realistic about your family situation and your parents as you discuss family matters and take into account everyone's preferences.
Meet this week's guest, Pam Krueger
Pam Krueger is a recognized investor advocate, award-winning personal finance journalist and author. She is the founder and CEO of Wealthramp (www.wealthramp....) , an advisor-matching platform that connects consumers with rigorously vetted and qualified fee-only financial advisors. It is the only advisor referral service that gives people full control over when and how they talk to their referred advisors.
Her perspectives on personal finance regularly appear in Marketwatch, Forbes, PBS Next Avenue, and she is a frequent speaker on fiduciary financial advice. In addition, Pam is an active volunteer member of the Retirement Income Committee at the Defined Contribution Institutional Investment Association (DCIIA), a non-profit dedicated to enhancing the retirement security of America's workers. She has also served on the California Jump$tart Coalition, an organization dedicated to increasing financial literacy among children and teens, where she created one of their most successful curricula available for K-12 teachers called, Investing Pays Off For Kids.
Each year, she spends part of her time in San Francisco, California and lives in Cape Cod, Massachusetts.
• Wealthramp (www.wealthramp....)
• Podcast: MoneyTrack (na01.safelinks...)
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