What to do with a parent’s house: key options explained

The first thing is to secure the house. Lock it, check the mail, and make sure nothing is obviously leaking or running. If your parent lived alone, you may need to keep the utilities on for a while, and that is usually fine to do in your own name for the time being. Get a few copies of the death certificate when you can, because you will be asked for them by banks, insurers and the county recorder. In Sacramento County, the recorder’s office handles property records, and you can ask them how the title is currently held. That matters a lot. If the house was in a trust, or held with a right of survivorship, the path is different than if it was in your parent’s name alone. When it is not clear, talk to a lawyer before you sign anything or transfer anything.

In the first weeks, do not empty the house in a rush. Walk through with a notebook and take photos of each room. Look for the obvious paperwork: the deed, mortgage statements, insurance policy, tax bills, and any trust or will. Keep those together. Change the locks if you are not sure who has keys. Tell the insurance company the house is vacant, because a vacant home policy is often different from a regular homeowner policy, and the difference depends on your situation. If there is a mortgage, call the servicer and ask what they need. Do not assume you must pay everything immediately; ask questions and get answers in writing.

Then comes the slower work. You and any siblings or other heirs need to agree on who is handling things and how decisions get made. If there is a will, the person named as executor usually has authority, but that depends on the probate process. Small estates sometimes avoid formal probate, and larger ones usually do not. A lawyer can tell you which applies. A CPA can help with the tax side, including what happens when the house is later sold. Do not guess about the stepped-up basis or capital gains; that is exactly the kind of thing a CPA should review with you.

Deciding whether to keep, rent or sell is really three questions. Can you afford to keep it, including taxes, insurance, maintenance and any mortgage? Is the house in a condition where renting is realistic, and do you want to be a landlord? And what do the heirs actually want? Keeping a house for sentimental reasons is understandable, but it has to pencil out. Renting can work, but it means repairs, tenant screening and rules that vary by city and county, so check with the county or city before you count on it. Selling is often the cleanest way to divide things, but timing matters and the market is not something anyone can promise.

If you are unsure about keeping it, a HUD-approved housing counselor can be a free, neutral place to talk through options, especially if there is a mortgage or reverse mortgage involved. For the legal title questions, use a lawyer. For taxes, use a CPA. For county records and property tax issues, call the county. Take it one step at a time, keep good records, and do not let anyone rush you into a signature.

More notes on this topic are at The Executor’s Clipboard.