As the beneficiary of an estate, you are legally entitled to the property left to you.
However, your inheritance doesn’t come without regulation.
There are specific liabilities, or legal responsibilities, that you assume along with your inherited estate property.
It is important to know that there are two main legal categories of Virginia property: tangible, and intangible.
Tangible Inherited Property
Your tangible property inheritance includes the physical assets that are left to you.
Homes, land, or any other physical, movable property is considered tangible.
Upon acceptance of your inheritance, you are responsible for the liability your tangible property carries.
An unpaid mortgage on a house, the loan on a car, or the personal property tax on land are examples of tangible inherited property liabilities.
Intangible Inherited Property
Intangible property inheritance are the non-physical assets you acquire.
Copyrights, patents, and trademarks are intellectual property that is deemed intangible.
Acceptance of intangible inherited property provides you the full responsibility of maintaining that property.
You must renew your patent, file ownership of your inherited trademark, and actively protect your copyright.
These are personal liabilities that you are responsible for settling.
Beneficiary Property Responsibility
Disclaimer of Inherited Property
Inheritance through a will or trust is distributed to you once the estate has passed through probate or other necessary legal processes.
In Virginia, you have a nine month period in which to disclaim, or reject, your inheritance.
It is your responsibility, as the beneficiary, to file your disclaimer in a timely manner.
Disclaiming property happens for a range of reasons, such as the inability to financially maintain the property that you become liable to manage.
Assessment of Inherited Property
As the beneficiary of property, you are liable to assess and provide the financial and laborious maintenance needs of your inheritance.
Your inherited land must adhere to the Virginia legislative requirements of land use, especially if your inheritance contains farmland or livestock.
Inherited Virginia Property Liability
Toxic Inherited Property
In Virginia, an “environmental contamination” is defined as being “any hazardous waste, substance or toxic material…that is regulated under any environmental law or regulation applicable to the property…shall include petroleum (including crude oil), natural gas, liquefied natural gas, ordnance, unexploded munitions, and asbestos.”
In other words, environmental contaminants are toxic materials that carry potential environmental harm.
While the transferral of lands contaminated by toxic materials is legally restricted, you are still liable for any toxic land you happen to inherit.
As the new owner of that land, you are responsible for the toxicity of your property.
You are subject to taking “corrective action,” which is your legal obligation to acknowledge and respond to the toxicity of your property.
Your response is based on the legislation regarding your particular contaminant.
It is recommended that you seek legal guidance when settling toxic property liability.
Your attorney will help you to understand your options for reclaiming, or restoring, your inherited property to meet environmental law standards.
Conditional Inheritance Restrictions
Inheriting land from a trust could leave you with instructions on how to manage your property.
You might have restrictions on how the property is used, whether or not you are able to receive income from the property, and whether or not you are able to reside on the property during your lifetime.
These are contractual restrictions that you are liable to comply with as the beneficiary.
Failure to comply with trust property restrictions will result in court interference.
As with property, you inherit the debt that is tied to your accepted inheritance.
A home carrying an unpaid mortgage, a loan that hasn’t been paid in full, and even interest on a loan that covers the property you inherit.
All debt that relates to your personal property becomes your personal liability.
You are responsible for making payments and settling the debts you inherit.
Estate Tax Inheritance
The property that you inherit from a will may affect your inheritance.
As a beneficiary, your inherited assets—along with the assets of your fellow beneficiaries—are legally subject for estate tax settlement.
Once the estate has been passed through probate, an estate tax is imposed based on the value of the estate.
That amount is a beneficiary liability.
Before your inheritance is distributed, you and your beneficiaries must settle the estate taxes on your inherited property.
Failing to do so will result in a lien against your inherited property, which can get you into serious financial and federal trouble.
Before accepting your inheritance, you need to evaluate whether you are financially capable of paying your inherited debts and taxes.
So, if you find that you are unable to handle the financial burden of your inheritance, you can disclaim it.
If you decide that you can manage the financial inheritance, you are liable to make the necessary payments.
Joint Beneficiary Inheritance
When you inherit a share of joint property, you and your co-beneficiary are liable to follow the plan of property management, if one exists.
The property is considered to be jointly owned, which means you own only an exact percentage.
You must manage your percentage, and you are liable for that percentage of the inherited debt, contamination, or tax on the property.
As the joint beneficiary, you must work with your co-beneficiary in managing your joint property.
Remember, each beneficiary with interest in the property has a say in how the property is managed.
Additionally, you or your co-beneficiary may buy the other’s share at fair market value at the time of sale.
If you disclaim your inheritance, your co-beneficiary is able to buy-out your share of the property, establishing full ownership.
However, disclaiming your shared inheritance will not automatically revert the property ownership to your co-beneficiary.
Rather, the property will pass to a named alternate beneficiary, or the inheritance will follow the Virginia successional laws.
Your inherited Virginia property liability is a complicated issue to navigate alone.
Consulting an attorney is recommended before accepting or disclaiming an inheritance, as well as in assessing the liabilities of your inherited property.
Schedule a consultation with our estate planning attorney to discuss your inherited property liabilities.