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April 20, 2021 · Marc Cormier
Inherited Property: What Do You Do Now?
By Marc Cormier
Last reviewed: September 29, 2026
You have just inherited a house. The feelings are complicated: grief, gratitude, confusion, and perhaps a small, unwelcome spark of anxiety about what this means financially. You are not alone in that response. Inheriting property is one of the most common ways people come to own real estate, and yet most people are unprepared for the decisions that follow.
The Emotional Side First
Before making any financial decisions, acknowledge the emotional weight of what has happened. This was your loved one's home. It holds memories, and the decision to keep or sell it is not purely mathematical. Give yourself time, but do not let grief delay action on time-sensitive legal and financial matters.
Step 1: Find the Will and Legal Documents
Your first practical step is locating the will, if one exists. Check the deceased's safe deposit box, filing cabinet, attorney's office, or personal safe. In Maryland, the person with custody of the will must file it promptly with the Register of Wills in the county where the deceased lived, even if no probate is expected. Delays in filing can raise questions with the court and among beneficiaries.
Beyond the will, gather these critical documents: the death certificate (order at least 10 certified copies, you will need them for everything from banks to the DMV to the title company), the deed to any real property, recent mortgage statements, property tax bills, insurance policies, and the most recent tax returns.
Step 2: Secure the Property
Before making any decisions about selling or keeping the property, secure it. Change the locks if you do not have all the keys. Neighbors, friends, or even distant relatives may have copies. If the property has a security system, make sure it is active. Notify local police that the property is vacant and provide a contact number. These steps may feel extreme, but I have seen too many cases where a property was stripped of valuables or vandalized because the family waited too long to secure it.
Step 3: Notify the Mortgage Company and Insurance Provider
If there is an existing mortgage on the property, notify the lender that the owner has passed away. The lender needs to know who is now responsible for payments and that the property is in probate. Under federal law, the Garn-St. Germain Act (12 U.S.C. Section 1701j-3(d)(5)) provides that a transfer to a relative resulting from the borrower's death does not trigger a due-on-sale clause, so the lender cannot demand immediate full payment just because the owner died, as long as the heir or personal representative continues making payments.
Insurance is even more urgent. Call the insurance company the same week you become responsible for the property. Ask whether the existing policy covers a vacant property and what the vacancy timeframe is before coverage changes. Many standard policies reduce or cancel coverage after 30 to 60 days of vacancy. If the policy does not cover vacancy, you need a vacant property endorsement or a separate policy.
What To Do This Week
If you are the Personal Representative or the family member everyone is looking at, here is where to start this week. These four steps protect the estate and give you the facts you need before any decision is made.
- Get the home appraised now. Do not wait for the market to "settle." The date-of-death value sets the tax basis, so an early appraisal protects the estate.
- Get a clear number on what is owed. Mortgage, liens, back taxes. You cannot evaluate any option without knowing what the estate is paying.
- Have the sell, rent, or keep conversation with every heir in the room. Not over group text. Everyone needs to hear the same facts at the same time.
- Bring in a real estate agent who has handled probate and estate sales before you list anything or sign anything. Probate sales run on court timelines and fiduciary rules that a general agent may not know.
Stepped-Up Basis: What Maryland Heirs Need to Know
One of the most important financial concepts for inherited property is the stepped-up tax basis. When you inherit a home, the IRS resets the property's cost basis to its fair market value at the time of the original owner's death. This means if you sell the inherited property, your capital gains tax is calculated from the date-of-death value, not the original purchase price. For properties that have appreciated significantly over decades, this can represent substantial tax savings.
In Maryland, state inheritance tax and estate tax add another layer. Maryland is one of the few states with both a state estate tax and an inheritance tax. The Maryland estate tax exemption has been $5 million since 2019 and is not indexed for inflation; as with any tax law, it is subject to change, and the Maryland Register of Wills publishes official information on Maryland taxes. The state inheritance tax exempts spouses, direct or lineal heirs (children, grandchildren, parents, grandparents), and siblings, while the 10% inheritance tax applies to non-exempt recipients such as nieces, nephews, and unrelated beneficiaries. If you are inheriting significant property in Maryland, a conversation with a CPA or estate tax attorney is essential before you make any decisions.
A Step-by-Step Action Plan for New Personal Representatives
Week 1: Order certified death certificates. Locate the will and file it with the Register of Wills. Notify the insurance company. Change locks and secure the property.
Week 2: Meet with a probate attorney to open the estate. Apply for letters of administration. Begin gathering financial documents for the estate inventory.
Week 3: Schedule a property appraisal. Contact a probate real estate specialist for a market analysis. Begin evaluating the keep-versus-sell decision with real numbers.
Week 4: Open an estate bank account. Notify known creditors. Begin the inventory filing process with the court.
Verify Property Insurance
If you are not moving into the inherited house immediately, verify that property insurance is in place and notify the insurer that the property is now vacant. Standard homeowner's policies often reduce or cancel coverage after a property sits unoccupied for 30 to 60 days. Lapse in coverage is one of the most common and most preventable mistakes in estate property management.
The Keep vs. Sell Decision: A Financial Framework
There are legitimate reasons to keep inherited property: sentimental value, rental income potential, or a belief that the property will appreciate further. But there are also real costs: mortgage payments, property taxes, insurance, maintenance, and management. The decision should be based on a clear-eyed assessment of the property's condition, the carrying costs, and your own financial situation.
I recommend running this simple calculation: estimate the net proceeds from selling the property today (sale price minus commission, closing costs, and any repairs needed). Then calculate the annual carrying cost (mortgage, taxes, insurance, maintenance, HOA fees). Compare that to what you could earn by investing the net proceeds. If the property's annual appreciation is unlikely to beat what your proceeds could earn in other investments, selling is usually the better financial choice for Maryland families.
Maryland Probate Tip
Maryland Probate Tip
In Maryland, estates with no more than $50,000 of probate assets may qualify for a small estate proceeding that is faster and less expensive than full probate; the threshold rises to $100,000 when the surviving spouse is the sole heir or legatee, per Estates and Trusts Section 5-601. A house titled in the decedent's name alone will almost always push the estate into regular administration, which catches many families off guard when they discover that a modest inherited home triggers the full process.
Marc's Advice
Marc's Advice
I tell every family I work with the same thing: do not let the inherited house sit empty and unattended for more than 30 days. Every week the property sits vacant costs the estate money in carrying costs and risks damage from weather, vandalism, or deferred maintenance. Make a decision within 90 days: either commit to keeping the property and move someone in, or begin the process of selling it. The worst outcome is indecision that drags on for months while the property deteriorates.
If This Were My Family
If This Were My Family
If my own mother passed away and left me her house in Silver Spring, here is exactly what I would do. I would order the death certificates the next day, call my probate attorney before the end of the week, and have a probate real estate agent walk the property within 10 days. I would not move anything, clean anything, or make any decisions until I had an appraisal and a market analysis in hand. I would sit down with my siblings, look at the numbers together, and make a family decision based on facts rather than emotion. The one thing I would not do is let the house sit empty for months while we deliberated.
Frequently Asked Questions
What happens when siblings inherit a house together?
They become co-owners and must agree on whether to sell, rent, or keep the property. Disagreements can be resolved through buyouts, mediation, or court action.
Should we get an appraisal right away?
Yes. Getting an appraisal soon after the owner passes protects the estate from capital gains tax on market appreciation, because the date-of-death value sets the tax basis.
What if siblings cannot agree on what to do with the house?
Options include buyouts, temporary rental arrangements, or mediation. If those fail, court action may be necessary.
How much does it cost to keep an inherited house?
Costs include property taxes, insurance, maintenance, utilities, and potential HOA fees. These expenses continue every month the property is held.
If You Decide to Sell
Selling inherited property during probate follows the estate's legal timeline, and in some situations requires court approval. The process is more structured than a standard real estate sale, but it is manageable with the right professional guidance. A probate real estate specialist understands the court timeline, the appraisal requirements, and the fiduciary standards that apply.
When you move from immediate first steps to the sell decision, our guide to the best way to sell inherited property in Maryland is the next step to read. It compares the selling paths, explains court approval, and shows how to weigh cash offers against the open market, without repeating the first-steps work above.
For a complete walkthrough of the probate process, read the Complete Guide to Probate in Maryland. If you are the personal representative, the Personal Representative Guide covers your duties step by step.
If you have inherited property and need guidance on your options, reach out for a consultation. Marc Cormier can help you understand the tax implications, the probate process, and the best path forward for your specific situation.
When the first weeks are behind you and the question becomes how to sell, the best way to sell an inherited property in Maryland guide walks through the selling options so you can compare them with real numbers.
Legal Note
For legal questions about your responsibilities as a Personal Representative, consult a competent Maryland probate attorney.
Legal Note
Consult your CPA or tax advisor regarding the tax consequences of your specific situation.
Legal Note
Court requirements vary depending on the circumstances of the estate. Consult your probate attorney for guidance.
