What about paying property taxes for the deceased?

What about Indiana property taxes on your parents’ or relatives’ home or other properties? Yes, someone needs to keep paying those taxes, even if the estate is in probate. As they say, time and taxes wait for no one. It will depend upon your relative’s estate plan, but rest assured, that typically either a trustee or estate administrator will be responsible for paying property taxes.

It’s important to keep this in mind because if the property taxes are not paid a lien can be placed on the property and eventually foreclosed. And that, of course, can become a problem!

Who Should Pay The Property Taxes?
If the property is part of a trust, then the trust will typically designate who is responsible for the payment of the taxes until the property either passes to an heir or is sold. If the property isn’t part of a trust, then it typically will be part of the probated estate. When this is the case, the estate’s representative is responsible for paying the property taxes and any mortgages until the property is sold or passes to an heir.

As long as your deceased relative’s estate is large enough to cover the property taxes there is seldom a problem. However, if the estate isn’t sufficient, then either you or other relatives may choose to pay the bills, or you could allow a lien to be placed on the property by the local taxing authority. It’s important to know that if you are not an owner of your deceased relative’s home (i.e. a cosigner on the loan) then you are not liable for property taxes and you have no legal obligation to pay them. However, this can get tricky, so feel free to contact the author below if you have questions.

Selling The Property

Rather than incurring additional debt or having a lien placed on the property many family members prefer to sell the property.  In doing this they can readily pay any taxes owed and also benefit from receiving the value of the home.  It’s also good to keep in mind that when you inherit property and then sell it, you only pay capital gains tax based only on the value of the property as of the time of your relatives death. A qualified realtor can assist you in determining the marketability of the property you have inherited.

 

More questions? get free access to estate and probate experts through the INDIANA PROBATE AND ESTATE HELPLINE. Call 317-344-8908 or complete the form below

Contact Information for the author- Mark McGarvey:

Indy Inherited Team at Keller Williams

mark@indyinherited.com

www.IndyInherited.com

317-536-2575

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