Real Estate the Ramsey Way - How Do I Prepare to Receive an Inherited Property?

Episode Date: June 1, 2026

When you’re set to receive a property through a will, there are important steps to think through ahead of time. We walk through how to prepare so you can handle the transition smoothly and make wise decisions. Next steps: ·   🏠Not sure what to do next when buying or selling your home? Check out our ⁠⁠Real Estate Home Base⁠⁠ for free tools and resources to guide your next steps. ·   🏠And if you’re ready to buy or sell your home, ⁠⁠connect with a RamseyTrusted® real estate agent⁠⁠. They’re experts who’ll help you confidently navigate homeownership the way we teach. Explore more from Ramsey Network: 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership   Ramsey Solutions Privacy Policy

I'm 36, newly married. I'm working on the death snowball, trying to get my and my husband's new life in order. And I have a uncle who is 78 years old here in California who has asked me to be the executor of his will. In that, he said he wants to bless me with his rental property in Arizona in that will. It sounds great right off the bat, but I know you're the expert on real estate. I just, while he's still here with us, is there anything that I should be prepared of? I don't want to walk into a rude awakening when he passes and, you know, if there's $8,000 left on the mortgage or any repairs or taxes and here I'm trying to clean up my life and I get stuck in a bear trap.

Okay. Does he own a lot of other assets as well? He has kind of like an elderly mobile home that he's leaving to a nephew of his. And so I kind of looked in the wheel and I said, you know, Uncle, if there is a mortgage left, which is $8,000 as of today, how would that be taking care of? And he said, well, I would want you to use the money in my bank account. And I said, well, that's not in your will. So the good news is we have a meeting with his estate planner in May.

And so I kind of just wanted to call him this show and get my debts in order to... So he's going to give you the property. What was he going to do with the money in his checking account? Who was going to receive that in his will? With the mobile home was going to be the nephew. Oh, okay. So the mobile... Nephew would get the checking account and the mobile home.

The house in Arizona, does it have a mortgage? It does. There's $8,000 as of today left on it. Oh, that's the $8,000. So there's no money coming to you currently to pay off that. mortgage. Correct. From what he's saying,

oh, just use the money in my bank account. And I said, well, then you'd have to leave me the money in your bank account. Right. So I'm like, let me call Dave and get my step in order. So the will needs to state that the cash, that $8,000 cash comes to you. Other cash and any other cash above $8,000 and the mobile home go to the other nephew, your cousin, I take it. and then you have a paid-for house that you're receiving.

Do you have any idea what this house is worth? Right now it looks like 300,000. Okay. It's a wonderful gift. I've never been to Arizona. Well, you're going to sell it. You're going to sell it right after he dies. Correct.

Yeah. And you're going to use it to have your life, you and your new husband's life, and you're going to pay off whatever debt you've got and or build wealth for you and your kids and your husband, and you're going to go forward. We do not need a rental property. in Arizona. So an executor, if you look at the word executor, it has built into it the word execute. Correct. So your job, if you're the executor, is to execute what the will says. So you're very wise to do what you're doing and make sure that you agree with what the will says

and that is there, the only other question I've got is who's going to be pissed off that's got Nothing. He doesn't have a wife or any kids. It's just this nephew and myself that he says he could trust. What about your mom or dad, whoever's his brother? Mom or dad, whoever. He's a second uncle. So my dad, my dad isn't left anything.

Is that going to be a problem between you two? Let's be real, probably. Okay. Okay, then you all need to talk about that before he dies. Yeah. He needs to tell your dad that I'm leaving this to your daughter and I'm leaving this to your nephew. Correct, correct. Because I don't want you to inherit drama.

Your job is not to execute drama. Your job is to execute his wishes in the will. And sometimes people don't, they piss people off after they die rather than while they're alive. And so that's the case here. So I would make this to where it's a slam. dunk, because there's no question, nobody's mad. If you're going to be mad at somebody, you need to be mad at the uncle while he's alive. Right.

Yeah, not you. You didn't do anything. I appreciate that. Last question. So when this property comes in and sold and it's paid off, then the only thing that comes out of the sale is the taxes of Arizona or any repairs to get this property up to date so it can sale, and the real estate agent gets their half, and we call it a day. Yep.

Not their half, but they get a commission, yes. Yes. You call it a day. And there is no income tax on this. If you inherit it at death and sell it within six months, market value is the basis, so you won't have any income tax. Oh, I didn't know. Thank you so much. Yep.

Step-up basis on death, yeah. I did not know that. So she's not going to have to pay capital gains tax on it at all. If she holds it for five years and it goes up to $600,000, they increase, yeah. Excellent. I didn't know that. Okay. If you sell it within six months, it's proposed.

It's supposed that you sold it for market value and at time of death. Dave, would you sell it right away? Yes. Instantly. Okay. You don't want to be a landlord. There's no point that you had $300,000 piled in the middle of your table with the kitchen table and you went and bought a rental house in Arizona. In a state you've never been to.

Yeah, that's not even a possibility. So, you know, and that's reverse engineering, which is called. to sunk cost analysis and that tells you don't do it don't keep it don't keep it don't keep it this is why people keep it we moved from Atlanta to Chicago and kept our house as a rental that's a landlord by default and that always is a recipe for bad things to happen like someone changing their Harley oil in your living room that's that's when this kind of crap happens right there that's exactly what happens bad idea bad idea so yeah You're, Ray, you're approaching this with a lot of wisdom.

You're the executor. You're going to have to execute, and you've already realized that what's in the will, and there wasn't money to pay off your house because the will didn't state what happened to the checking account money. And so now you're having that reworked with the lawyer. That's wise. I would also just ask your uncle to call your dad and say, hey, I don't want you to be mad at anybody. I'm leaving this to your daughter, and you need to be happy for her.

And your uncle can do that, and it'll keep your dad. from getting himself twisted. And if he wants to get twisted, he can do it now instead of at you later. And you don't get into all kinds of drama over a tiny little estate of an old trailer plus 300 grand. But Dave, we've taken the call where she's going to get 300 grand from the sale of this house. And dad's going to be knocking the door saying, where's my cut? Yeah.

I want some. Yeah. That should have been mine. That should have been mine. After all I've done for you and all that stuff starts. Yeah. Yeah, so you got to go ahead and just nip it in the bud. Nip it, nip it in the bud.

I love what you say, Dave. If you need to have a hard conversation about your will, have the courage to do it while you're still alive. Don't be a coward. Yeah. We're trying to start building our forever home. And sometimes we're like, yeah, let's go ahead and, you know, get in bed, you know, take a loan out. And then there's time where you'd be like, well, what if we just cash flow, everything, call it a day?

We are debt-free We want to have new That's good And we have been saving For the past couple of years Both of us got A raise A pretty big raised

So how much have you saved Right now It's a little bit over 180K $180 and what $80,000 $180,000 Wow

And what is the house going to cost The quote that we got is around between 380 and 390. Okay. Did you save 180 in two years? Yes. Wow. Excellent. Yes.

So, you know, like I said, we try to figure if it's okay for us to stop investing right now just for a couple of years. Yeah. Or, you know, to put all that money into. cash flow in the house or if it's okay for us to take out a helog. Did you save $180 while investing, 15%? Yes, no, we were not investing 50%. We only investing between 5% and 8%.

Okay, okay. I would stop investing completely. I'm with you, and I would cash flow this thing, and here's the thing you need to remember. It'll take you a year to build it. Correct. So you can start in one year, because you need two years worth of savings,

you'll have the whole amount, right? Yes, that's what we're hoping for. If everything works out, the way, you know, we can find it. I would start the house in one year. I'd get all my plans done. Have you got the lot already? Yes. And it's already paid for?

Yes, we... Is it paid for? I'm sorry? Yes, it's paid for. Okay, good. So all we got to do is just cover the bricks and mortar. Do you have your plans done? Yes.

You have your builder selected? Yes. Awesomeness. Okay. Well, what we do on, what I've done a couple times, including the building we're sitting in, as a matter of fact, I did not have a hundred percent of the money in the bank when we broke ground, but I knew it would be here by the time I needed it. Meaning that if it takes you a year to build and it takes you two years to save the money, then you'd be safe to start building in one year. Does that make sense to you? Yes.

Yes, definitely. Yeah. And if you can do this in two years and stop everything, and you'll have a paid for $380,000 plus the lot, a $400, $450,000 house. Sweet. How old are you guys? 32 and he's 37. That's amazing.

What's your incomes? It's 100 and around 150. How did you save this money so fast? You guys live on nothing, don't you? Well, we, I think we're pretty good savers. I think you're above average. It's very impressive. So here's the thing.

So we don't have them much. If you moved in two years from today, would you be okay with that? I think I just want to go ahead and get started. I don't mind getting alone just because I guess I'm more of the, on the more emotional side. You don't really want a loan. You just want a house. Yes. I guess you can say that. Okay. Well, I mean,

but like I said, what we teach, what we teach is best is paying cash, next best is a house you can pay off of 15 years. In your case, you can pay it off in one year. If you started a day and it was finished in one year, you would need to borrow one year's worth of savings rate or about $100,000 and you pay that off in one year. Yes. I agree.

My fear is that you'll let your foot off the gas and not pay it off in one year. That's my fear. So I would love to talk you into waiting just one extra year, which will go pretty fast. I mean, to me it feels like COVID was like last month and it was five almost six years ago. I agree. Yeah. And so my point is this thing goes fast. So if you start, you know, I don't know.

guys keep talking about it, but anywhere in there is fine with me. If you want to start now, you're not doing anything stupid. It's not, it's a good, better, best, okay? And what, what you guys are talking about cash flow and 100% is the best. I love that. There's no hiccups in that, you know, better than, but, but, you know, and still in the good range is paid it off in one year, which is if you took a loan out today, and you don't need to take out a loan today, you'd need to take out a loan somewhere in the building process because you won't quite have enough to finish it. Correct. But, I mean, you could get started today, put 180 into it.

If you slow walk the project. I was going to say any delay. And it takes 18 months. You'll be there. You can make it. You know, you'll make it out. So just, you know, but just be looking at that and thinking about this. I like the plan of taking dead off the table and we have to push this through because it makes you do a whole bunch of stuff.

keeps you from having scale creep in the kitchen. You know, you select a different dishwasher. You select a different, whatever. And I'll add one other thing to this on the emotions, okay? You can justify a lot of things emotionally when you say it's my forever house. And I've been doing this for a long time and I grew up with parents in the real estate business. There is no such thing as a forever house. You will not be there forever.

statistically the chances of you dying in this house are very close to zero very close so this idea of a forever house there's only one it's heaven that's it you don't have a forever house here you're going to move stuff's going to happen things are going to change that you can't see good and bad that are going to give you an opportunity to move up move out move somewhere and this is a great house and it's a great plan and all of that but take the pressure off of a forever house because it's like because then everything has to be perfect and I've built a bunch of houses that I live in and they're never perfect. It's never a perfect process. It's a very messy, combative, combustive process. And if you put the pressure on it that it has to be perfect because

we're going to be here forever, it's just too much. You can't breathe in that. Yeah, plus you're going to look at it in five years and want things to look a little different anyway. Oh, I don't even want talk about it. Just saying. Sounds like you have a little experience with that. Man, yeah, yeah. I mean, I, but, and I, I sold, I was actually when I was 22, I was in, we were selling houses in a subdivision where we built custom homes. And the people in there that were the hardest to deal with were the ones that had, had, they thought this was the, going to be their last home. Right. Or their only home ever. And, and that puts the pressure on the process to be perfect.

Can't be. They're over there every day driving the subs crazy, you know. Let them do their work. It's a piece of drywall. Let them do their job, okay? Good. For God's sake. You know, and it's just, it, and it changes their pressure on how fast we get this done

and how much money we take and how much money we spend and all that. So anyway, all that to say, Maria, I think you guys have done an extraordinary job. Way to go. We're proud of you. and if you start this month and you take on a little debt and you pay it off fast, that's not the dumbest thing in the world, but one step smarter would be to cash flow it. So,

and anywhere in between there, like we start in six months and we go 18 months to build it, oh, now we made it. You know, that kind of thing. Yeah, I think that's what's going to end up happening anyway. Yeah. Takes a minute.

Takes a hot minute to get all this stuff done. But yeah, it's a great, great way to go. And when you're paying cash like this, you're going to watch every dollar in the budget with the builder. Make sure everything's, dialed in and you push all those buttons, it makes a big deal.

I don't get that call very often. Oh, I love a call like that. She has options and she has time, which is wonderful. And she's wonderful. And money. Saved it all. They live on nothing. Yeah. Pretty impressive. Hey, guys, thanks for listening to Real Estate the Ramsey Way.

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