Nobody really prepares you for the moment a home becomes yours through loss. One day, it belongs to your parents. Then, after a phone call or a quiet afternoon in a solicitor’s office, it belongs to you, or to you and your siblings, which can feel like an entirely different thing. According to a Trust & Will survey of 1,000 Americans, 38% of Americans report real estate as part of an inheritance they have received or expect to receive. For many families in Chicago and the South Suburbs, an inherited home Chicago families find themselves holding is one of the most significant financial and emotional decisions they will ever face. What you do with it matters. Here are three families who faced that decision, and what happened next.
Family One: The Quick Decision That Cost Them
When Margaret’s mother passed, the family home in the south suburbs had been in the family for over forty years. Margaret was the only child. She was grieving, she was overwhelmed, and a neighbor knocked on the door within two weeks, offering to buy the property for cash. It felt like a relief. She said yes.
Six months later, Margaret discovered that the home had appreciated significantly and that she had likely left a substantial amount of money on the table. More significantly, she had not spoken to a tax advisor before accepting the offer. The step-up in basis, a provision that resets the home’s value to its current market value at the time of inheritance, often reducing or eliminating capital gains tax entirely, had not been explained to her. She had paid taxes on a gain she may not have needed to pay at all.
The lesson here is not that selling quickly is wrong. Sometimes it is exactly the right call. The lesson is that selling without professional guidance first is almost always a costly mistake. An SRES® and a CPA working together can make sure you understand exactly what you have before you decide what to do with it.
Family Two: The Siblings Who Almost Lost Each Other
David and two sisters inherited their parents’ home in the Chicago area jointly. Their parents had not left a will. David wanted to sell immediately and divide the proceeds. His eldest sister wanted to keep the home in the family, at least for now. His younger sister was not sure what she wanted but felt pressured by both of them to make a fast decision.
What followed was eight months of difficult conversations, a period of legal uncertainty, and a strain on family relationships that took years to fully repair. When someone passes away without a will, assets, including homes, can be left in limbo, tangled in legal proceedings that eventually split ownership among several relatives. Without a clear agreement among heirs, inherited properties can become genuinely complicated to manage or sell.
Illinois homeowners can avoid this situation entirely with a Transfer on Death Instrument, known as a TODI. Think of it like naming a beneficiary on a bank account, but for your home. The homeowner signs a document today naming who inherits the property. They keep 100% ownership and full control while alive. They can sell, refinance, or cancel the TODI at any time. The moment they pass, the named heir simply files a Notice of Death Affidavit with the county, and the house is legally theirs within days, not months.
The Illinois Fast-Pass: What Is a TODI?
Two things catch many families off guard about a TODI. First, the homeowner must record it with the County Recorder of Deeds while still living. A TODI sitting in a drawer at the time of death is worthless. Second, heirs still receive the step-up in basis. This resets the home’s value to current market value at inheritance, which can significantly reduce or eliminate capital gains tax on a future sale. An estate attorney can set one up quickly and inexpensively. For many Illinois families, it is the single most practical estate planning step a senior homeowner can take.
What eventually helped David’s family was bringing in an estate attorney and a neutral real estate professional who could lay out their options clearly and without taking sides. They sold the property eighteen months later, divided the proceeds, and gradually found their way back to each other. The process was hard. Having the right people in the room made it survivable.
Family Three: The Son Who Turned It Into an Opportunity
When Jonathan inherited his aunt’s two-bedroom condo in the south suburbs, his first instinct was to sell it quickly. He already owned his own home. He did not need a second property. But his SRES® suggested he slow down and look at the full picture before deciding.
The condo was mortgage-free. The neighborhood was stable. The rental market in that area was strong. After speaking with a financial advisor, Jonathan decided to hold the property and rent it out. Two years later, the rental income supplements his retirement savings in a meaningful way, and the property has continued to appreciate. He has not ruled out selling eventually, but he is in no hurry.
Jonathan’s situation is not right for everyone. Managing a rental property comes with its own responsibilities and costs. However, his story illustrates something important: inheriting a home opens a door, and you get to choose which way you walk through it. The only mistake is making that choice without enough information.
What the Numbers Tell Us
Trust & Will surveyed 1,000 Americans and found that more than 70% of inherited properties result in a real estate transaction of some kind. Among past heirs, 56% sold the property. Nearly half made a different choice. No single right answer exists. What matters is making the decision deliberately, with full information, and without unnecessary pressure.
Cotality’s 2025 property transfer report recorded 340,000 inherited properties across the US in 2025. That figure represents 7.4% of all property transfers, an all-time high. For Chicago area families, inherited homes are becoming one of the most common real estate conversations happening right now.
The Three Questions Worth Asking First
Before any decision is made about an inherited home, three questions are worth sitting with. First, what does the tax picture look like? The step-up in basis rule can significantly reduce capital gains liability, but it needs to be understood before a sale. A CPA with real estate experience is essential here.
If you’re unfamiliar with capital gains tax and how it may affect the sale of a home, “Understanding Capital Gains When You Sell Your Home Over 50” provides a straightforward overview of the rules, exclusions, and considerations that may apply.
Second, is there a will, and is probate required? Illinois has specific probate rules that affect how quickly and how cleanly a property can be transferred or sold. An estate attorney can clarify this quickly. Third, what does everyone involved actually want? In families where multiple heirs are involved, taking the time to have a real conversation before taking action saves enormous heartache later.
For those considering a sale, “10 Questions to Ask Before You Sell Your Home After 50” can help you think through the financial, practical, and emotional factors before making any decisions.
If family conflict is a concern, the free one-page guide Managing Conflict When Selling a Parent’s Home is worth reading before any decisions are made. For a broader overview of the financial considerations involved, AARP’s guide to personal finance for seniors is a solid starting point. And if you are facing decisions about belongings and contents inside the home, the free one-page guide What to Do With What’s Not Going With You walks you through that process practically and gently.
A Final Thought
An inherited home carries the full weight of a life lived. It carries memories, history, and sometimes disagreement. It also carries real financial value and real decisions that need to be made at a time when most families are still in the middle of grief.
You do not have to rush. You do not have to figure it all out in the first few weeks. What you do need is the right information and the right people around you, so that whatever decision you make, you make it with your eyes open.
My goal is simple. I want to make sure you feel informed, empowered, and supported at every stage of this process. That is why I put together a free resource library packed with guides covering everything from downsizing and aging in place to senior living options and financial planning. And if you would like to understand more about what an SRES® does and why it matters for homeowners over 50, the Homeowners 50+ page is a good place to start.
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Disclaimer: This article is provided for general informational purposes only and should not be considered legal, financial, tax, estate planning, or real estate advice. Every family’s situation is unique. Before making decisions regarding an inherited property, probate, taxes, estate planning, or the sale of real estate, consult with a qualified attorney, CPA, financial advisor, or other appropriate professional regarding your specific circumstances.
If you’re starting to think about what comes next, you don’t have to figure it out on your own. Sometimes it helps just to talk things through.
You can always take the next step at your own pace, with no pressure and no expectations. I’m always happy to help you get a clearer picture of your options.
Michelle Williams is a REALTOR® and SRES® serving Chicago and the South Suburbs, helping homeowners 50+ make confident decisions about their next move.