We Understand The Ins And Outs Of Real Estate Law

The home you inherited has a lien. Now what?

On Behalf of | Jul 5, 2023 | Estate Planning

Inheriting a home – particularly one you don’t plan to live in – can be a mixed blessing. Chances are that eventually you’ll be able to sell it for an amount that more than makes up for any time and expense you put into fixing it up and dealing with issues surrounding this asset you’re now responsible for.

What can make things more complicated is if there’s a lien on the property – other than a mortgage, which is a type of voluntary lien. This may not be something you learn about right away. Possibly your deceased loved one wasn’t aware of it or forgot about it. However, unless you decline (“disclaim”) the inheritance, which you need to do as soon as possible, that lien is now your responsibility. 

Usually, involuntary liens involve unpaid taxes or a court judgment. The lien allows the creditor to take the home if the lien is not paid off as required. Unlike some debts, a lien doesn’t go away because the person who owned the property died.

What are your options for dealing with a lien?

If you’re keeping the home, you first want to find out more about the lien and make sure it’s still valid and hasn’t already been paid off. If it is a current, valid lien, you have some options. Which you choose will have a lot to do with how much it is:

  • You may be able to pay it off before you place the home on the market.
  • You can possibly wait and pay off the lien from the money you get from selling the home, if that’s an option in the area where the home is located.
  • If the lien is significant, you may just want to allow the creditor to seize the property.

If it’s important to keep the home in the family and the lien is large, you may want to talk with other heirs to see how they feel about paying it off from the estate. 

When there’s a lien (or multiple liens) on a home, it can make transferring the title more complicated. It can also make the probate process longer and more complex. If you’re grieving the loss of a loved one, having to deal with issues like this can feel overwhelming. If you’re in this situation, it can be helpful to get legal guidance as soon as possible.