Inherited property: accept or decline?
Only if you know the financial circumstances and the condition and value of the inherited property can you make a sensible decision about whether to accept or reject the inheritance. By law, you have the option of rejecting the inheritance within six weeks at the competent probate court. The deadline is the date on which you learn of the inheritance. If you do not respond within this period, the inheritance is deemed accepted.
Step 1: Determine the financial situation of the deceased
In order to get a comprehensive picture of the deceased's financial situation, you will need to do some research. It is not necessarily enough to just look at the bank statements. There may also be investments in stocks and funds. To protect yourself from unpleasant surprises, you must first and foremost check whether there are any outstanding loans, consumer or real estate loans, or whether the deceased had taken on any guarantees or other debts. If their documents are very confusing, you can apply to the probate court for what is known as estate administration. This serves to separate the assets of the heir(s) from the estate of the deceased. This is to ensure that the private assets of the heirs are not affected if, unexpectedly, many creditors have to be satisfied from the inheritance. Your liability as an heir is thus limited.
Step 2: Check the condition of the inherited property
If the inheritance includes one or more properties, you should of course examine these closely before deciding to accept the inheritance. If the inherited property is an apartment building, you must check whether all apartments and commercial spaces are rented, whether major renovation and refurbishment work is pending, and whether the property is profitable, i.e., whether rental income generates a return. If the building is managed by an administrator, they can provide information on this. They will also have the relevant documents.
In the case of a single-family home or a condominium, you should also check the condition and amenities. If necessary, you can seek the help of a building expert, architect, or real estate agent. If renovations have accumulated that exceed your budget, this is of course no reason to turn down the inheritance, even if you have no interest in using or renting out the property yourself. Instead, you should focus on how you can sell your inherited property at a good price.
Have you inherited a property and are unsure whether to accept the inheritance? We would be happy to advise you.
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Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.
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