You Inherited a House. Now What? The Chattanooga Guide to Inherited Real Estate

In this episode, Blake Watson breaks down what really happens when you inherit real estate, with a focus on Tennessee and Georgia. Whether you are dealing with the process right now or just want to be prepared, this episode walks you through the legal, financial, and practical steps involved.

Topics Covered:

What probate is and why it matters for inherited property

Probate is the court-supervised process that validates a will, confirms a death, and formally transfers ownership of real estate to heirs. In most cases in Tennessee and Georgia, if the property was solely in the deceased persons name and not held in a trust, probate is required before any action can be taken.

What happens when there is no will

Dying without a will is called dying intestate. State law determines who inherits, and a court-appointed executor manages the estate. Heirs generally cannot sell the property until probate is complete or the court grants authority to do so.

The tax picture for heirs in Tennessee and Georgia

Neither Tennessee nor Georgia has a state inheritance tax or a state estate tax. Federal estate tax only applies to estates exceeding very high exemption thresholds, currently 15 million dollars per individual in 2026, or 30 million dollars for a married couple with proper tax planning. Most heirs will not owe any estate tax at all.

Stepped-up basis and capital gains tax

When you inherit real estate, your tax basis is stepped up to the fair market value of the property as of the date of the owner’s death, not what the original owner paid for it. This can significantly reduce or eliminate capital gains tax if you sell the property shortly after inheriting it. If the inherited property was a rental, the depreciation clock also resets to zero.

Holding costs and ongoing responsibilities

Property taxes, homeowners insurance, utilities, mortgage payments and basic maintenance do not stop during probate. These costs need to be kept current to avoid penalties or liens. Vacant properties may also carry higher insurance premiums and increased risk of vandalism or damage.