Inheriting a home can be a blessing — or a burden — especially when that home comes with strings attached, like an unpaid mortgage or lingering liens. If you're dealing with this situation in Knoxville or surrounding areas, here's what you need to know so you can make informed, confident decisions during an already emotional time.

First Things First: You Can Inherit Debt (Sort Of)

While heirs don’t inherit a mortgage or lien personally, the debt is tied to the property — and must be addressed before the home can be sold or transferred. That means if the home has a mortgage, those payments will need to continue. It’s a common misconception that you can stop paying the mortgage once a home enters probate. In reality, mortgage payments are still required during the probate process. If they aren’t made, the lender could foreclose on the property.

If there are liens (like unpaid taxes, contractor bills, or HOA dues), those must be resolved before closing.

Types of Liens You Might Inherit

In Knoxville and across Tennessee, common liens that might show up on a probate property include:

• Mortgage liens

• Property tax liens

• IRS or state tax liens

• Mechanic’s liens (contractors who weren’t paid)

• HOA liens
  

Each type must be handled differently, and the timelines and rules can vary, which is why having experienced real estate and legal professionals in your corner is so important.

Step 1: Confirm What’s Owed

Start with a title search to identify any recorded debts. This is usually done through a title company or real estate attorney. Knowing the exact amount owed on the mortgage or any liens helps you understand your options going forward.

Step 2: Decide Whether to Keep, Sell, or Walk Away

Once you know the financial situation, you have several paths:

• Keep the home: You’ll need to take over mortgage payments and resolve any liens. This often requires refinancing or negotiating payoff terms.

• Sell the home: Proceeds from the sale will first go toward paying off the mortgage and any liens, then the remainder can be distributed to beneficiaries.

• Walk away: In some cases, if the debt is more than the home’s value, it may make sense to decline the inheritance (yes, that’s allowed!).
  

Common Pitfall to Avoid

One common mistake many heirs make is assuming that inherited homes are automatically free and clear of debt. But failing to account for existing mortgages or liens can lead to costly delays or even legal complications. Make sure to carefully evaluate the home’s financial situation before making decisions.

Don’t Go It Alone — Get Help

Handling an inherited home, especially when liens or mortgages are involved, can get complicated fast. That’s where our team steps in. At The Jeff LaRue Team, we help families across Knoxville and Middle Tennessee understand their options, connect with trusted attorneys and title companies, and make informed decisions with professionalism and care. Whether you're dealing with a mortgage, lien, or other inherited property challenges, we’re here to guide you every step of the way.

Whether you’re the executor or a beneficiary, we’re here to guide you through each step — from property evaluations to clearing title issues and finding the right buyers if you choose to sell.

Have questions? Contact us today to schedule a no-pressure consultation. We’re here to help.

Disclaimer: This information is for general knowledge and informational purposes only and does not constitute financial, tax, or legal advice. We are not lawyers, financial advisors, accountants, loan officers, or mortgage brokers. Please consult with a qualified professional to understand your specific needs.