Preparing to inherit property is something most families avoid talking about until it’s too late. The conversation feels uncomfortable. Nobody wants to think about a parent dying. So the topic gets pushed off, and when the time comes, heirs are left scrambling through probate, guessing at tax rules, and arguing with siblings about what to do with the house. In The State of Inherited Property Report 2026, our survey of 1,350 heirs and executors, 34% said they felt not very prepared when they first inherited the property and another 31% did not know where to start. Only 9% described themselves as very prepared.
It doesn’t have to be that way. A few straightforward steps taken before a parent dies can keep the property out of probate, reduce legal and administrative costs, and help families avoid preventable tax mistakes. The families who have the smoothest experience after a death are almost always the ones who planned ahead.
For families already dealing with an inheritance, see our complete guide to selling inherited property. For the specific practical issues that create chaos when no preparation was done, see our guide to what to do now so your kids don’t inherit a mess.
What Should You Do Before a Parent Dies to Prepare for Inheriting Property?
The most impactful steps are: transfer the property into a living trust (to keep it out of probate), confirm insurance and title are current, gather key documents, have an honest family conversation about what happens to the property, and consult with an estate planning attorney and CPA. Doing these things now can save your family months of delays, thousands in legal fees, and significant emotional stress later.
Quick checklist for preparing to inherit property:
| Step |
Action |
Who handles it |
Why it matters |
| 1 |
Have the family conversation |
Parent + all heirs |
Prevents disputes caused by unspoken assumptions about who gets what |
| 2 |
Set up a living trust and transfer the deed |
Estate planning attorney |
Keeps property out of probate and covers incapacity; the single highest-impact step |
| 3 |
Confirm how title is held |
Family (pull deed from county recorder) |
Title determines whether probate is required and how the stepped-up basis applies |
| 4 |
Get the tax picture clear |
CPA + estate planning attorney |
Avoids costly mistakes like gifting instead of inheriting; confirms basis and reassessment rules |
| 5 |
Gather key documents |
Family (with attorney and CPA input) |
Heirs need immediate access after a death; searching during grief causes delays |
| 6 |
Address the property’s physical condition |
Parent (with family support) |
Deferred maintenance reduces sale price and increases carrying costs for heirs |
| 7 |
Plan for multiple heirs |
Parent + attorney |
Shared ownership without a plan leads to conflict, stalled decisions, and forced sales |
| 8 |
Review and update the estate plan regularly |
Parent + attorney (every 3-5 years) |
Life changes make old plans dangerous; unfunded trusts and outdated beneficiaries cause probate |
Why Is It Important to Prepare Before Inheriting Property?
Most people assume that inheriting property is simple. A parent dies, the house passes to the kids, and everyone moves on. In reality, the process is often slow, expensive, and emotionally draining, especially when no planning was done in advance.
Here’s what happens when families don’t prepare. The property goes through probate, which often takes 6 to 18 months and can cost thousands in attorney and court fees (timelines vary by state and county). Heirs can’t sell, rent, or even make major decisions about the property until the court grants authority. Siblings who assumed they’d “just figure it out” discover they have very different ideas about what to do. And tax advantages that could have saved the family real money are lost because nobody documented the right things at the right time.
For families who are already past this stage, see our step-by-step guide to selling an inherited house and our guide to the team you need to sell inherited property.
What Should Families Discuss Before Inheriting Property?
Who should be involved. The property owner (your parent), all potential heirs, and ideally the family’s estate planning attorney. An attorney may feel too formal for a first conversation, so start with just the family. But the attorney should be brought in soon after.
What to discuss. Does your parent want the property to stay in the family, or should it be sold? Who handles the sale? Who lives there, who pays the carrying costs, and for how long? Are there multiple heirs, and does everyone agree? When one child wants to keep the house and others want cash, how will that work?
Why this prevents problems later. Inherited property disputes don’t usually start with money. They start with unspoken assumptions. One sibling assumes they’ll get the house because they live nearby. Another assumes everything will be sold and split equally. A third didn’t even know the property existed. When these assumptions collide after a death, the result is conflict, delay, and sometimes litigation. A single honest conversation while your parent is alive can prevent all of it. For a look at what families most regret not doing, see our guide to what heirs wish their parents had done.
Put the plan in writing. Even an informal written summary of what the family agreed on is better than nothing. A formal estate plan is better still. But the conversation has to happen first.
Should Parents Put Property in a Living Trust Before Death?
If you take only one action from this guide, make it this one. For most families, transferring property into a revocable living trust is the most effective step for preparing to inherit property. It can keep the property out of probate, and when other assets are properly titled or have beneficiary designations, it often minimizes or avoids probate for the estate overall.
How Does a Living Trust Help Heirs Avoid Probate?
When property is held in a living trust, it does not go through probate when the owner dies. Your successor trustee can manage and sell the property without court involvement. Avoiding probate can save months of waiting and thousands of dollars in attorney fees and court costs. For families who already have a trust in place and need to sell after a death, see our guide to selling a house in trust after death.
The trust also provides privacy, since probate is a public proceeding. It offers continuity, because the trustee can act immediately. And it provides flexibility, since the trust can include specific instructions about who gets what, under what conditions, and when.
What Should Parents Do to Put Property in a Trust?
Create the trust with an estate planning attorney. A revocable living trust can be set up relatively quickly and affordably. Your parent retains full control of the property during their lifetime. For a full comparison of trusts vs. other options, see our guide to whether parents should put their house in a trust.
Transfer the property into the trust. Updating the deed is the step that gets missed most often. With real estate, the trust won’t keep the property out of probate unless the deed is actually titled in the trust. Your attorney should prepare and record a new deed transferring the property from the parent’s individual name into the trust.
Name a successor trustee. This is the person who takes over management when the parent dies or becomes incapacitated. Choose someone responsible, organized, and trusted by the family. See our guide to what the successor trustee needs to do for the full process.
Review the trust every 3 to 5 years. Family circumstances change. A trust written when the kids were teenagers may not reflect the family’s situation 20 years later. Regular reviews prevent outdated provisions from creating problems.
For families who didn’t set up a trust before a parent died, probate is the likely path. See our guide to probate real estate for the full process. If a trust exists but the deed was never transferred into it, your attorney may be able to use a pour-over will or other mechanism. Probate is often still involved in those situations.
Why Should Families Plan for Incapacity Before Inheriting Property?
Many families focus on what happens after death, but get blindsided by incapacity first. When a parent becomes unable to manage their affairs (due to dementia, stroke, or illness), someone needs legal authority to handle the property. Without it, the family may need a court-supervised conservatorship, which is expensive, slow, and invasive.
Durable financial power of attorney. This document lets a trusted person manage the parent’s financial affairs (including real estate) if they become incapacitated. The Consumer Financial Protection Bureau has a useful overview of how powers of attorney work. Without one, no one can pay the mortgage, manage tenants, or sell the property without court involvement.
Health care directive. Separate from financial authority, this lets the parent specify their medical wishes and designate someone to make health care decisions.
If the property is in a trust, the trust itself handles incapacity. The successor trustee steps in automatically under the trust terms. This is one of the often-overlooked advantages of a trust over a will: it covers incapacity, not just death.
How Does Property Title Affect What Happens When You Inherit?
How the property is titled determines everything about what happens after a death. Many families don’t check this until it’s too late, and they’re surprised by what they find.
Sole ownership. If the property is in the parent’s name alone, it will go through probate unless it’s transferred into a trust or has a transfer-on-death (TOD) deed.
Joint tenancy with right of survivorship. The surviving owner automatically becomes the sole owner at death. No probate needed for the property itself, but the surviving owner should confirm with an attorney that the title is properly cleared.
Tenants in common. Each owner holds a separate share. At death, the deceased owner’s share does not automatically transfer to the other owner. It goes through the deceased’s estate (probate or trust), which can create complications when siblings co-own property.
Community property (married couples). In community property states, property held as community property may receive a full stepped-up basis on both halves at the first spouse’s death. Community property with right of survivorship can also qualify. In many community property states, community property can get a full step-up at the first death, while joint tenancy often does not. The nine community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Confirm the titling with your attorney to make sure you qualify.
Transfer-on-death deed. Available in many states (rules vary), a TOD deed names a beneficiary who automatically receives the property at death, without probate. It’s simpler than a trust but less flexible. A few caveats: a TOD deed must be properly recorded before the owner’s death. It doesn’t handle contingencies well (what if the named beneficiary dies first?). It can create complications with multiple heirs or minors. And it doesn’t coordinate with the rest of the estate plan, so other assets may still go through probate.
Action item: Pull a copy of the current deed from the county recorder’s office (many are available online). Confirm how the title is held and whether it matches your parent’s estate plan. When the title is in the parent’s name alone with no trust and no TOD deed, probate is likely.
Mortgage note: If the property has a mortgage, it doesn’t disappear at death. Someone must keep making payments to avoid default. Before transferring the property into a trust or changing title, confirm any lender requirements. Federal law limits the enforcement of due-on-sale clauses on many residential loans for certain family and trust transfers. For example, transfers to an inter vivos trust where the borrower remains a beneficiary and there’s no transfer of occupancy rights are generally protected. Confirm with the lender, especially for non-standard or commercial loans. If there’s a mortgage, HELOC, reverse mortgage, or liens, see our guide to inherited property and debt for how those obligations affect heirs.
What Tax Issues Should Families Review Before Inheriting Property?
Preparing to inherit property includes understanding the tax rules that will apply after the death. Several decisions made before death can save heirs significant money.
Why Is Inheriting Property Usually Better Than Receiving It as a Gift?
When you inherit property, your cost basis “steps up” to the property’s fair market value at the date of death under IRC Section 1014. In practical terms, this means you generally owe capital gains tax only on appreciation that occurs after the date of death. That’s true as long as the basis is properly supported with a date-of-death appraisal. This can eliminate decades of accumulated capital gains in a single moment. Selling soon after inheriting often results in little taxable gain if the sale price is close to a defensible date-of-death value.
That’s why estate planning attorneys almost always advise against gifting real estate during a parent’s lifetime. A gift carries the parent’s original cost basis (called “carryover basis”), which means the child inherits the full capital gains liability. Inheriting the same property after death resets that basis to the current market value.
For a full breakdown, see our guide to capital gains tax on inherited property.
Why Do Heirs Need a Date-of-Death Appraisal?
The stepped-up basis only helps if you can prove what the property was worth on the date of death. After a parent passes, one of the first steps the family should take is ordering a date-of-death appraisal from a licensed appraiser. Keep this appraisal with the estate file permanently. It’s the primary evidence if the IRS ever questions your claimed basis. In some estates, elections on the estate tax return (like the alternate valuation date) can affect the basis reference point. Your CPA should coordinate the appraisal with any Form 706 filing requirements. Investment and commercial property appraisals are more complex. See our guide to how inherited investment property is valued.
Can Inheriting Property Trigger a Property Tax Reassessment?
In many states, a change in ownership triggers a property tax reassessment that can increase the annual tax bill. The rules vary significantly by state, so ask the family’s CPA or attorney how the property will be reassessed after the transfer.
California’s Proposition 19 is the most notable example. It limits the ability of heirs to keep the previous owner’s low assessed value. To qualify for the intergenerational exclusion, the heir must make the inherited home their primary residence and file for the homeowner’s exemption within one year of the transfer. In California (Prop 19), filing within one year matters because late filing can limit you to prospective relief, meaning you may lose the benefit back to the transfer date. The separate Prop 19 exclusion claim generally must be filed within 3 years (and before a third-party transfer).
Other states handle reassessment differently. Some states reassess on every transfer. Others provide broader exemptions for family transfers. Don’t assume California rules apply to your state, and don’t assume your state has no reassessment triggers. Check with your local assessor’s office or CPA early.
Can State Estate or Inheritance Taxes Apply to Inherited Property?
While the federal estate tax exemption is $15 million per person in 2026, roughly 12 states plus DC impose their own estate taxes at much lower thresholds ($2 million in Massachusetts, $7.35 million in New York, and as low as $1 million in Oregon (as of March 2026, verify since thresholds can change). Five states (Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania) also charge an inheritance tax. Knowing which taxes apply before death allows the family to plan around them. For the full breakdown, see our guide to inherited property taxes.
What Documents Should You Gather Before Inheriting Property?
When a parent dies, heirs need access to documents immediately. Grief is the worst time to go searching for a deed, insurance policy, or mortgage statement. Preparing to inherit property means having these documents organized and accessible before the crisis hits.
Families preparing to inherit property should gather the deed, trust, will, mortgage records, insurance policy, property tax bills, HOA documents, capital improvement records, powers of attorney, and contact information for the attorney, CPA, and insurance agent.
| Document |
Where to find it |
Why heirs need it |
| Current deed |
County recorder’s office (often available online) |
Confirms how title is held and whether the property is in the trust |
| Trust document |
Attorney’s office, home safe, or secure digital storage |
Defines trustee authority, beneficiaries, and distribution instructions |
| Will |
Attorney’s office or home safe |
Names executor, catches assets not in the trust (pour-over will) |
| Mortgage statement and lender contact |
Monthly statements or lender’s online portal |
Payments must continue after death to avoid default |
| Homeowner’s insurance policy |
Insurance agent or carrier’s online portal |
Must notify insurer of death; vacancy limits may apply within 30-60 days |
| Property tax bills |
County assessor’s office or online portal |
Confirms current tax amount and whether reassessment will be triggered |
| HOA documents (if applicable) |
HOA management company or board |
Dues continue after death; transfer and sale rules may apply |
| Capital improvement records |
Parent’s files, contractor invoices, permits |
Supports the date-of-death appraisal and may adjust the cost basis |
| Powers of attorney (financial and health care) |
Attorney’s office or home safe |
Allows family to act if parent becomes incapacitated before death |
| Professional contacts (attorney, CPA, insurance agent) |
Parent’s records or contact list |
Heirs need the team in place immediately; searching for contacts wastes critical time |
Store it somewhere accessible. A fireproof safe, a trusted attorney’s office, or a secure digital location that the successor trustee, executor, or a personal representative can access. Make sure at least one other person (besides the property owner) knows where the documents are.
Include a “letter of intent.” This is an informal document where the parent explains their wishes for the property and why they made the decisions they made. It’s not legally binding, but it can prevent misunderstandings and reduce conflict among siblings.
What Should Parents Fix Before Heirs Inherit the Property?
Deferred maintenance is one of the biggest issues heirs face after a parent’s death. Homes owned by aging parents often have years of accumulated repairs that make the property harder to sell and more expensive to hold.
Encourage maintenance now. Roof, HVAC, plumbing, and electrical issues don’t get cheaper over time. Parents who have the means should address major maintenance items before death. That saves the heirs from inheriting a property that needs $50,000 in work before it can be listed.
Know the property’s condition. If a parent is resistant to repairs, at least document the property’s current state. Take photos and notes. This helps the heirs later when they need to decide whether to sell as-is or invest in repairs.
Check insurance coverage. Is the homeowner’s policy current and adequate? Many aging homeowners let coverage lapse or don’t update policies to reflect current replacement costs. Confirm coverage now. Our guide to inherited property insurance covers what changes after a death and what heirs need to do about coverage gaps.
When the property has been transferred into a trust, ask the insurer how to list the trust as the named insured (requirements vary by carrier). After a death, many standard policies have vacancy clauses that limit coverage after 30 to 60 days. Plan ahead: identify who will check the property weekly, keep utilities on, secure valuables, and winterize if needed.
Consider a pre-listing inspection. If the family knows the property will be sold, a pre-listing inspection while the parent is alive is smart. It gives everyone a clear picture of the condition and helps set realistic sale price expectations.
What Should Families Do Before Inheriting Rental or Commercial Property?
Not all inherited property is a family home. When a parent owns rental houses, apartment buildings, or commercial real estate, preparing to inherit property requires additional steps.
Gather the rent roll, leases, and tenant contact information. Heirs will need to step into the landlord role immediately after the death. Knowing who pays what, when leases expire, and where security deposits are held prevents chaos.
Document vendor contracts and the property manager’s contact information. If a property manager handles day-to-day operations, the transition is smoother. Parents who self-manage should document every vendor, contractor, and service provider so heirs can step in.
For commercial or industrial property, gather environmental history files. Phase I ESAs, tank closure reports, and permit documentation matter. Environmental liability follows the property, and having records ready helps avoid surprises during a sale. See our guide to environmental due diligence for inherited commercial property.
How Should Parents Plan for Multiple Heirs Inheriting Property?
If the property will pass to more than one child, planning for that shared ownership before the death is critical. Shared ownership is where most inherited property situations go wrong.
Decide in advance whether to sell, keep, or have one heir buy out the others. Grief is the worst time to make this decision. Emotions are high and everyone is under pressure.
If one child wants the house, structure the buyout now. The parent can include specific provisions in the trust or will. For example: “I leave the family home to Sarah.” The provision might require Sarah to pay her siblings their equal share of the appraised value within 12 months. Without clear language like this, buyouts become contentious negotiations.
If the property will be sold, designate a decision-maker. The parent can name one child as trustee or executor with authority to manage the sale. Having one decision-maker prevents the “four siblings, four opinions, zero progress” problem. For more on multi-heir dynamics, see our guide to selling inherited property with siblings.
Consider whether leaving the property to multiple heirs is the right move at all. Sometimes the better plan is to sell the property before death and distribute cash. Another option is to leave the property to one heir and equalize with other assets like life insurance or investment accounts. An estate planning attorney can model different scenarios.
How Often Should Parents Review Their Estate Plan?
Estate plans are not one-and-done documents. A plan created when the kids were in college may not fit the family’s situation 15 years later. Preparing to inherit property is an ongoing process, not a single event. Regular reviews catch gaps before they become problems.
Review every 3 to 5 years, or after any major life event. Births, deaths, marriages, and divorces are all triggers. So are moves to a new state, big changes in property value, and new tax laws.
Confirm beneficiary designations match the plan. Life insurance policies, retirement accounts, and TOD deeds have their own beneficiary designations that override the will. Make sure they’re current and consistent.
Check that the trust is still funded. Parents sometimes create a trust but then buy new property or refinance without adding the new deed to the trust. An unfunded trust doesn’t help avoid probate.
Update the team. Has the family attorney retired? Has the CPA changed? Is the insurance agent still responsive? The professionals who will help the heirs should be current and accessible.
How Can Parents Plan for Liquidity Before Heirs Inherit Property?
Part of preparing to inherit property is making sure the estate has enough cash to cover immediate costs after a death. When the property is the estate’s primary asset, and there’s no liquid cash, heirs face pressure. They may be forced to sell at a bad time or accept a low offer just to cover carrying costs.
Encourage parents to plan a liquidity source. Options include a dedicated savings account earmarked for estate costs, life insurance proceeds that can fund the estate’s early expenses, or a home equity line of credit. A HELOC or line of credit should be established and understood while the parent is alive. Don’t assume the estate can open or draw on new credit after death. Even $20,000 to $50,000 in accessible cash can buy the estate enough time to sell the property on the family’s terms instead of under financial pressure. For the full breakdown of what holding an inherited property costs month to month, see our guide to the real cost of keeping inherited property.
What Questions Should You Ask Your Parent Before Inheriting Property?
These questions cover the gaps that cause the most problems after a death. Bring this list to the family conversation or the attorney meeting. For additional guidance on executor and administrator responsibilities, the IRS publishes Publication 559.
About the property and title:
- How is the property titled right now (sole ownership, joint tenancy, community property, trust)?
- Is the deed actually recorded in the trust, or just the trust document created?
- Are there any liens, mortgages, HELOCs, or reverse mortgages on the property?
- Is there a transfer-on-death deed in place?
- Does the property have any code violations, pending assessments, or HOA issues?
About the estate plan:
- Is there a will? When was it last updated?
- Is there a revocable living trust? When was it last reviewed?
- Who is named as executor or successor trustee?
- Are powers of attorney (financial and health care) in place?
- Do beneficiary designations on insurance and accounts match the estate plan?
About taxes and costs:
- What is the property’s current market value (approximate)?
- What was the original purchase price (for understanding the stepped-up basis benefit)
- Will a property tax reassessment be triggered by the transfer?
- Does the estate expect to owe state estate or inheritance tax?
- Is there enough cash or insurance to cover carrying costs after the death?
About the plan for the property:
- Should the property be sold, kept, or transferred to a specific heir?
- If multiple heirs are involved, who is the decision-maker?
- If one heir wants to buy out the others, how is that structured?
- Is selling before death a better option for this family?
- Who is the family’s estate planning attorney, CPA, and insurance agent?
What Should Families Do Before Inheriting Each Type of Property?
The core steps for preparing to inherit property apply to every property type. But specific property types have additional considerations that families often miss.
What Should Families Check Before Inheriting a Primary Residence?
A family home is the most common inherited property and usually carries the most emotional weight.
- Confirm the deed is in the trust (or a TOD deed is recorded)
- Verify homeowner’s insurance is current and ask about vacancy limits
- Document the property’s physical condition with photos and notes
- Gather mortgage statements, property tax bills, and HOA documents
- Discuss with siblings: sell, keep, or one heir buys out the others?
- Check whether a property tax reassessment will be triggered (especially in states with intergenerational exclusion rules)
- Confirm powers of attorney are in place in case of incapacity
- Identify who will secure and check the property if it becomes vacant
What Should Families Check Before Inheriting a Rental Property?
Inherited rental property adds landlord responsibilities that start immediately after the death.
- Gather the current rent roll, all leases, and tenant contact information
- Locate security deposit records and confirm which account holds them
- Identify the property manager (or document all vendors if self-managed)
- Confirm landlord insurance is current (not just a standard homeowner’s policy)
- Review each lease for assignment clauses or change-of-ownership provisions
- Understand that rental income during estate administration is reportable on Form 1041
- Plan for continued property management during probate or trust administration
- Consider whether a 1031 exchange makes sense if the family wants to reinvest rather than cash out
- Confirm the property is in the trust or has a TOD deed to avoid probate delays that could disrupt tenant relationships
What Should Families Check Before Inheriting a Commercial Property?
Inherited commercial real estate has higher carrying costs and more complex due diligence.
- Gather all leases, CAM reconciliations, tenant estoppels, and rent roll
- Identify the property manager and all vendor/service contracts
- Locate environmental records (Phase I ESAs, tank closures, permits)
- Confirm commercial property insurance is current and adequate
- Review leases for any provisions triggered by ownership changes or death
- Understand that commercial property appraisals require a certified general appraiser (not a residential appraiser)
- If the property is held in an LLC or partnership, review the operating agreement for transfer provisions
- Plan for active management continuity during estate administration (commercial tenants expect responsiveness)
- Assess whether environmental due diligence is needed before listing (see our guide to environmental due diligence for inherited commercial property)
What Mistakes Should Families Avoid Before Inheriting Property?
These mistakes are common, expensive, and entirely preventable.
Do not add a child to the deed “for convenience.” Parents sometimes add a child to the title, thinking it simplifies the transfer. In reality, it can trigger gift tax reporting and expose the property to the child’s creditors or divorce proceedings. It can also reduce the stepped-up basis benefit on the transferred portion and cause property tax reassessment in some states. A trust or TOD deed accomplishes the goal without these risks.
Do not rely on a will alone for real estate. A will does not avoid probate. Property titled in the deceased’s name alone still goes through probate even with a will. A trust or TOD deed is needed to keep real estate out of probate court.
Do not assume a trust works if the deed isn’t in it. A trust that was created but never funded won’t keep the property out of probate. “Never funded” means the deed was never re-recorded into the trust. An unfunded trust is one of the most common estate planning failures. Verify the deed, not just the trust document.
Gifting appreciated property during the parent’s lifetime carries the parent’s original cost basis. That can create a large capital gains tax bill that inheritance would have avoided entirely.
Do not skip the insurance review. An uninsured or underinsured property during the period between a parent’s death and the sale can result in catastrophic uninsured losses. Confirm coverage before there’s a problem.
Do not make uncompensated transfers if a parent may need long-term care. Medicaid long-term care eligibility includes a look-back period for gifts and below-market transfers. The look-back is often 5 years, depending on the state. In California, Medi-Cal long-term care uses a 30-month look-back period. Penalties can apply when adding a child to the title or transferring assets to an irrevocable trust without proper planning. A standard revocable living trust is often used to avoid probate, but it generally does not protect the home for Medicaid purposes. If long-term care is a realistic possibility, consult an elder law attorney before changing ownership or making gifts.
Frequently Asked Questions About Preparing to Inherit Property
What Is the Single Most Important Step When Preparing to Inherit Property?
Transfer the property into a revocable living trust. This keeps the property out of probate, speeds up the transfer, reduces costs, and gives the family more control. If a trust isn’t possible, a transfer-on-death deed (where available) is the next best option.
Should My Parents Gift Property to Me Before They Die?
In most cases, no. Gifting real estate during a parent’s lifetime means you receive the parent’s original cost basis, which can create a large capital gains tax bill when you sell. Inheriting the property after death gives you a stepped-up basis that can eliminate most or all of the capital gains.
How Do I Bring Up Estate Planning With My Parent?
Frame it around making things easier for the family, not around death. A good opener: “I want to make sure we’re not stuck in probate for a year.” Many estate planning attorneys offer family meetings to help facilitate the conversation.
What If My Parent Refuses to Plan?
You can’t force a parent to create a trust or update their will. But you can share information, express your concerns, and offer to help with the process. Sometimes a conversation with a trusted advisor (their attorney, CPA, or financial planner) is more effective than pressure from a child.
Do You Need a Lawyer to Prepare for Inheriting Property?
Not necessarily. Many of these steps (the family conversation, document gathering, reviewing how title is held) can be done without professional help. But when it comes to creating or updating a trust, reviewing tax implications, and structuring a multi-heir plan, an estate planning attorney is essential.
What If the Inherited Property Is in Another State?
Out-of-state property may require a separate probate proceeding called ancillary probate. A trust or TOD deed avoids this entirely. Out-of-state property is one of the strongest arguments for a trust when preparing to inherit property across state lines. See our guide to selling inherited property out of state.
What Should Families Do Next to Prepare for Inheriting Property?
Families preparing to inherit property should start by confirming how the property is titled, whether it is held in a trust, who has authority to act, where the key documents are stored, and whether the family understands the parent’s wishes for the property.
These steps can be taken gradually, one at a time, whenever the family is ready. But the families who have the smoothest experience after a death are almost always the ones who started early, even if they only completed one or two items at a time.
If the property has already been inherited and the family is preparing to sell, Inherited Property Match helps heirs identify vetted brokers with experience in inherited property sales, probate sales, trust sales, multi-heir situations, and out-of-state coordination.
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About the Author
Rhett Fruitman is the co-founder of Inherited Property Match and President of Real Estate Broker Match (REBM). He has a background at Citi Private Bank, CBRE, and in the 1031 exchange industry, and focuses on helping families navigate the legal, tax, and logistical complexities of selling inherited property.
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This article is for general informational purposes only and does not constitute legal, tax, financial, or real estate advice. Every estate situation is unique. We strongly encourage you to work with qualified professionals, including a probate attorney, CPA, and experienced real estate broker, before making any decisions related to inherited property. Inherited Property Match is a service of Real Estate Foundation, Inc.