All too often siblings struggle to get along when they have lost a loved one and are dealing with the estate. They may not agree on the terms of the will or they may feel they haven’t been treated fairly. One of the biggest challenges comes in deciding whether to sell or keep inherited property. When siblings can’t agree, it can lead to endless delays and continuing frustrations.
Why Would Siblings Force the Sale of Inherited Property?
If your goal is to keep your parents’ property when they die, you may wonder why siblings would force the sale. There could be many reasons, from the personal and emotional to the practical and financial. One of the main reasons that siblings would force the sale of their parents’ home is because they want cash instead of the house. A common scenario is one sibling who lived in the house with their parent doesn’t want to leave. Another sibling may want to rent the house for income while a third sibling just wants to sell and get out from under the burden.
Once the house has been sold and the debts paid, the siblings would most likely split the remaining money equally unless the will stipulated otherwise. Cash is still king for many people and easier to disperse for those who need the money. If your siblings are in a bad financial situation, they may look at the sale of the inherited property as the way out of their problems.
Another reason for the sale of an inherited house is because they can’t afford the taxes associated with the inheritance or other costs. A house comes with maintenance expenses and taxes. It may also need to be updated, which can be costly. If someone doesn’t have the money for these costs, they may have no other choice but to sell.
Can We Share Ownership?
The first step if you are inheriting a house with your siblings is to file probate. Probate is the legal process where the assets of the estate are handled and dispersed to the heirs after creditors have been paid. While you can avoid probate with some estates, most of those that include real property will need to go through the formal process.
The short answer to the question of whether you can share ownership is yes. However, it depends on the terms of the will and whether the house was to be sold or left to the heirs. If there is a mortgage on the property, that may also help determine if the siblings can keep the property.
Your first step is to file probate with a petition to the county court where the deceased person resided. You will also file the will with the court if one was written. An executor or personal representative is chosen who will oversee the estate, including managing the care of and sale of the house.
Appraise the Property
One of the tasks for the executor is to have the property appraised to determine its value at the time of the person’s death. An appraiser will compare the property to others within the same area and of similar size and age. They will also look at the condition of the property. An outdated property will have lower value even if it is in good condition than one that has been recently renovated.
Consider a Buyout
One option for siblings with real property is to discuss a buyout. If all the siblings own the property together equally, the one who wants to keep the house could buy out their siblings. They would pay each sibling their portion of the inheritance based on the total value of the house.
For example, say a house is appraised at $210,000. There are three siblings and each one owns a third or $70,000. If one sibling wanted to keep the house, they could offer to pay each of the others $70,000 for a total of $140,000 to own the property.
Of course, things get a bit more complicated if there is a mortgage on the house. You can’t just pay for the part that your siblings own and own it free and clear. You would need to consider how much is owed on the mortgage and other legal requirements. In this case, you should talk to an estate attorney who could advise you on your specific situation in your state.
File a Partition
A partition is an action taken which is filed with a court. It is asking the court to create a legal order which would force the sale of the house. They will determine if one of the owners should buyout the others or if the property needs a physical dividing, such as with large amounts of land. They will also determine if the house should be sold and the proceeds divided among the siblings.
Can a Partition Be Stopped After Being Started?
Once a partition has been filed, it can’t be stopped until it has been decided by the court. The action is made at the expense of the person filing. If a buyout agreement isn’t reached, the property may end up going for auction and the sibling who wanted to keep the property wouldn’t get it.
This isn’t an easy process, and it’s often quite costly as you pay hourly attorney fees. However, it is about the only option available if you and your siblings can’t agree on what to do with the house.
If you and your siblings own an inherited property, you need to work together to determine the best option for the house. If you can’t agree, it can get expensive to reach a resolution. Make sure you know what options are available to you and present those choices as factually as possible. Once your siblings realize their choices, they may be able to make a rational decision that is right for all of you.
Just know that you need to work with an experienced estate attorney if you cannot reach an agreement on the property with your siblings. The situation could get messy as you or they consider a partition to force the sale of the property.