October Financial Planning Month: What to consider as inherited properties hit a record high
An impending boom is expected over the next 20 years by way of a generational wealth transfer to the tune of $120 trillion. In an increasing number of cases, that transfer of wealth is set to occur as inherited properties.
According to real estate data from Totality, such transfers reached a record high in 2025 when 9% of all property transfers were comprised of inherited properties.
Having the conversation
As we can’t predict outcomes or life expectancy, conversations with adult children about the future need to take place while everyone is still at the table.
When the time comes, heirs don’t just inherit the home that is a monument to comfort and precious memories. They unfortunately also inherit property taxes, deferred maintenance, insurance premiums and, oftentimes, an unpaid mortgage. Expensive mistakes happen when important decisions are made under the distress of grief.
Bringing the family together to discuss the details now will help negate the stress of handling the situation in the future. Here is a checklist that can help keep the conversation moving:
Inherited properties mortgage balance and terms
Begin by addressing the balance and terms of the mortgage loan:
- Is it assumable?
- Must it be paid off at death?
- Can it be refinanced?
Some clauses, such as a due-on-sale clause, can force a decision to be made quickly.
Property taxes and deferred maintenance
Though the parents may have paid the same property taxes for years, that may change for their heirs. Many states require reassessment on inherited properties.
Upkeep needs of a home do not respect the timelines of probate, and there may be deferred maintenance. If the heirs intend to rent the property, a major repair could mean the loss of months of rental income. With the rate of personal savings in the United States currently sitting at around 3%, such repairs could also deplete the financial cushion of an heir.
Inherited properties insurance and management
Because standard homeowner policies often lapse or restrict coverage when a property is unoccupied, heirs may be exposed to loss in the interim when nobody is living in the property.
With management duties, designating who will do what immediately (such as keeping up the yard, paying utilities, etc.) can help frustrations from bubbling over in the future when such decisions would be made under difficult circumstances.
Discuss your options now
Interwoven between the moments of gathering and making memories in the home, it is imperative to bring everyone together annually to discuss plans for the future of the home. Addressing this sooner rather than later plays a large part in determining whether the inherited properties increase or deplete the family wealth.
When you want personal advice on your investment strategy, turn to Old National Wealth Management. For more info click here.
Disclosures:
Old National Wealth Management is the umbrella marketing name/logo for wealth-related services, including Old National Wealth Advisors, Old National Private Banking and 1834 services. Old National Wealth Management, Old National Private Banking, and 1834 are not affiliated with LPL Financial.
Investment instruments utilized by Old National Wealth Management are not insured by the FDIC nor any other government agency, are not deposits, or other obligations of Old National Wealth Management, Old National Bank, its parent company or affiliates, and involve investment risk including the possible loss of principal invested.
