The problem with inheriting a house
All too regularly, we (and other attorneys) have come across situations in which benefactors leave to their beneficiaries properties which have not been fully paid for and probably still have a bond on them. And in these cases, some of the benefactors do not leave their beneficiaries the cash to maintain the bond repayments.
When a situation like this arises, one or two poorly advised beneficiaries in their experience have tended to think purely of the monthly income that the surviving spouse or heirs will probably need. They do not consider making provision for the bond payments.
While this might sound hard to believe, as executors of estates on which we have not previously been consulted, it is a predicament that we come across all too often. As advisers to the beneficiaries, we have then to suggest that some of the assets (often the house itself) should be sold off to meet the outstanding bond payments. This can make us very unpopular, even though we are in no way responsible for the problem.
In some cases, the beneficiary will indicate that he or she is prepared to take over the bond on the property or apply for a new bond. But we will then find that he or she does not qualify for such a bond because the National Credit Act has tightened the conditions under which bonds are awarded.
In general, any attorney handling a deceased estate is likely to find that the heirs grow impatient, especially if they have been left short of money. This is even more so since you are working with the law, which can be time-consuming and tedious in its necessary procedures.
So, this is the problem with inheriting a house. The question is then, how to deal with it?
How to deal with it
In the above circumstances, for the benefactor, the ideal situation would be for the property to be fully paid off. If this is not possible, we recommend making monetary provision through your will to help your beneficiaries pay off any bond. If you are a beneficiary inheriting a property that is not yet fully paid off, it is essential not only to think in terms of monthly income, you must also be aware of, and make provision for, any bond repayments when considering your inheritance. This will help protect the rest of your inheritance. If you need any help, it is advisable to contact an attorney, please do not hesitate to contact us at [email protected].
Images courtesy of Mister GC at FreeDigitalPhotos.net.