Inheriting the Family Home Can Be Complicated Without an Estate Plan

The great wealth transfer expected to occur over the next 25 years includes expectations of tapping into wealth from home ownership. This may not work out as seamlessly as expected, says a recent article, “Americans Are Counting on an Inheritance Instead of Saving—But Family Homes Could be a Complication" from realtor.com.

One of the biggest threats to inheritance is debt, which is on the rise among retirees. Homes are often considered ideal collateral for debt, and many opt to use the equity in their homes to help pay for the cost of living and long-term care. Their children’s inheritance may not be what was expected.

Reverse mortgages and home equity lines of credit (HELOCs). These options enable homeowners to trade the equity in their homes for liquid cash without having to sell. There will be fees, which will deduct a portion of the cash, and repayment may involve selling the home if monthly payments can’t be made.

Probate and titles. If estate planning isn’t done on time and with the guidance of an experienced estate planning attorney, legal hurdles can eat away at an inheritance. If a home hasn’t been placed in a trust or ownership allocated with a transfer-on-death deed, the property may be subject to probate. Depending upon the jurisdiction, probate can take months and become very costly. If heirs disagree about how assets are distributed, the result could be a forced sale of the assets.

Property taxes and maintenance. Inheriting a home isn’t like inheriting a portfolio. Houses come with carrying costs, including property taxes, insurance and maintenance.

Property taxes are the most significant hidden threat to heirs. In high-tax communities, inheriting a house without the funds to pay property taxes could also force heirs to sell the home. An estate planning attorney should be consulted to strategically plan how heirs will pay property taxes if the family’s intent is for the children to inherit the house.

The greatest risk to an inheritance is not having an estate plan in place. Begin by contacting an estate planning attorney to draft an estate plan, which may include a will, trust, power of attorney for finances and a healthcare proxy. Discuss how the home should be titled to avoid probate disputes or tangled ownership.

No one should count on an inheritance as a means of funding their future. An inheritance should be a welcome gift. However, it’s not a financial plan. An estate planning attorney can help protect the home and its value, ensuring that heirs enjoy the benefits of a true wealth transfer.

Inheriting a family home can quickly become more complicated than many people expect, especially when debts, probate, and rising property taxes are involved. The best way to protect your family’s home and ensure a smooth transfer is to put the right estate plan in place long before it’s needed. Our knowledgeable estate planning attorneys at The Werner Law Firm can help you create an estate plan for your needs.

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Reference: realtor.com (September 19, 2025) “Americans Are Counting on an Inheritance Instead of Saving—But Family Homes Could be a Complication"