March 28, 2022
Michigan Probate Lawyers Answer, “Should You Disclose Defects to Property You Plan to Leave to Heirs?”
You may already be aware that obvious and not-so-obvious defects must be disclosed when selling a property. Sure, you may not want to go into every single detail about a property you are essentially giving to someone else. It’s also true that there’s no consequence to you if you fail to provide certain information to your heirs. However, there are reasons why you want to disclose latent and patent defects of real property in your estate plan.
What’s the difference between latent and patent defects?
A patent defect is an obvious defect, something that will be discovered in a home inspection. For example, an inspection will reveal water damage from a roof leak that has created brown spots on the ceilings. Cracks in the wall and crooked floors will indicate a sinking foundation.
However, a latent defect is something that isn’t readily apparent. For example, where there’s water damage, there’s mold, but an inspector isn’t going to cut into the ceiling to find it. However, if the owner is aware that there’s mold under the ceiling or the in walls, he or she has a duty to disclose that.
Won’t these defects be discovered in probate anyway?
Yes and no. Real property will be appraised before it’s transferred to rightful heirs, but it won’t include an invasive inspection unless there are special circumstances in which one is warranted. However, your heirs may have to wait quite a long time to inherit only to discover problems with the property that may lower its value, require expensive repairs, or make it unusable. A property with patent defects may be uninhabitable or sell for a price far lower than hoped for. Moreover, the property may be so difficult to sell that it sits on the market for a long time, and your heirs are forced to pay property taxes and upkeep while waiting for a buyer.
What’s the real harm of not disclosing defects?
Not disclosing the defects can lead to some headaches and nasty surprises for your heirs. Aside from heirs not knowing the real value of a property or facing inheriting a property that has defects, your heirs may be forced to pay upfront costs to fix the damage. They may also be inheriting a property worth considerably less than expected if defects are known. Once the defect is discovered, they’ll have to remedy it and/or pay for any harm done to others or other people’s property. Your heirs may be subject to liability if they sell or rent the property without disclosing the defects to whoever buys or rents it.
There’s always the option of fixing defects now. Since defects only worsen with time, fixing them now saves your estate in the long run.
If you have questions, we invite you to speak to our Michigan probate lawyers about how to address property defects in your estate plan. We can help you address any issues and create a plan to deal with them so your heirs aren’t left with any surprises that cause unnecessary hardships.
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