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Do property taxes change when real-estate is transferred after death? Also, how do I set up the mortgage I inherited? Both in TX

Dallas, TX |

My grandfather passed away and actually has 2 houses. House (1), he lived in and has been paid off for several years. The property taxes on House (1) have also been frozen for over 20 years now as he was in his late 80's and locked in the property tax when he retired. For House (1), is there a way to keep those prop taxes the same in TX, like an "Exclusion of Transfer"? House (2) was purchased in the mid-1990's and still has a mortgage balance. After inheriting House (2), what are my options regarding setting up the mortgage so that I can make payments or sell the house while at the same time limiting or eliminating my liability in case the payments can not be made (in other words protecting my credit)?

The Will is in probate now, and has been since October. The estate has been making payments for House (2), and the Will actually calls to pay off House (2), but allows for the executor to change that if she sees fit. The executor inherits House (1), I inherit House (2), but both are set up under my grandfather's estate currently. My grandfather's estate is set to be close in Feb., but not sure if my Aunt (the executor) wants to close it so soon (though it's been about 6 months now). I think she is does not want the property taxes to go up on House (1). However, not closing the estate effects the rest of us in a negative way, so just trying to help her. Also, if no payments are made on House (2), and the estate is still in probate, can a foreclosure effect any other assets (ie-House 1) in my grandfather's estate as it stands in probate?

Attorney Answers 3

  1. Generally, property valuations change as a result of sale or improvement (or lack thereof). On occasion, some states such as TX have an annual reappraisal so you must be on your toes each year. The death of an owner is not generally thought to be the reason for a change in valuation.

    NOTE: The use of the Internet for communications with the firm or this attorney will not establish an attorney-client relationship and messages containing confidential or time-sensitive information should not be sent.

  2. Most likely yes given your facts above. The previous poster is correct that valuations could change based on sale or transfer of property. Elderly individuals also typically get valuation freezes for "Over 65" in addition to the general homestead discounts. You would need to discuss all financing options with the current mortgage company

  3. You do not mention anything about any probate administration on your grandfather's estate. Some type of probate will have to occur. As to the property taxes, they will most certainly go up on House (1). The loss of the over 65 exemption and the homestead exemption will result in higher taxes at the same appraised value. The appraised value could easily change, up or down, each year. House (2) did not have those two tax exemptions so those property taxes will only change if the appraised value changes. As to the mortgage, the lender will accept payments from anyone. If payments are not made, the lender cannot foreclose without notice and in some cases permission of the court in which the probate proceeding is pending. You are not personally obligated to pay the mortgage unless you assume liability. You may or may not be able to sell House (2) quickly depending upon the type of probate proceeding that occurs. You will have to be represented by an attorney in that probate proceeding and that attorney can address these issues specifically.

    DISCLAIMER: This is not specific legal advice and does not establish an attorney/client relationship.

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