Home Mortgage Alliance Corporation (HMAC)

Navigating the Minefield of Inherited Property

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Published Date 10/4/2024

In many ways it may have been a blessing that you were not an only child. In others? If you and your siblings are on track to one day inherit your parents’ home, take heed of this cautionary tale as told by Realtor.com’s Julie Taylor.

In a recent online discussion, an anonymous poster shared a tale that's becoming all too familiar in the world of inheritances: a family feud over a deceased parent's home. When their mother passed away in 2018, she left her house to her three children. Two siblings wanted to sell immediately, but the online storyteller wished to keep the family home. He offered to buy out his siblings, and they agreed. After getting the property appraised, he paid each sibling a third of the home's value.

Fast forward to 2023, and our homeowner decides to sell. Plot twist: the house's value had tripled. Now, his siblings are crying foul, demanding a share of the profits. Family members are taking sides, with some insisting he should split the money to keep the peace. So how did Taylor’s experts weigh in?

Jessa Gary, an estate planning attorney, is unequivocal: "The brother is not obligated to give them anything. His siblings are not the property owners—and are not legally entitled to anything—because he already bought them out."

Jonathan Ross, a probate attorney, points out that when the brother bought the house, he also assumed all the risk. "If the value went down, I don't think the siblings would be offering to pay him for the loss," he notes.

Robert Steele, a trusts and estates expert, agrees: "He just did better, and legally, I don't see any basis for complaint.” But houses aren't the only things families fight over when it comes to inheritances. Nikki Beauchamp, a real estate broker, has seen her fair share of squabbles over household items. To keep the peace, Ross suggests siblings take turns choosing items or hire an estate sale company to sell everything and split the proceeds.

Another common issue is the sibling who won't move out—or wants to move in—after a parent's death. Raul Gastesi, an attorney, has seen cases where a sibling living in the house feels entitled to stay rent-free, or a sibling with financial problems wants to move in but can't afford to buy out the others.

So, what can be done to prevent these family feuds? Experts recommend that parents address these issues in their wills. They can specify how the property should be divided or sold, and even state that if one child buys out the others, the transaction is final.

For siblings inheriting property, the safest bet is often to sell and split the proceeds evenly. If a buyout does occur, get an appraisal and consult a lawyer, especially if the sibling doing the buying is also the executor of the estate. Most importantly, put everything in writing. As Gary warns, "Families often think they don't need to go through the legalities because they are family. But it can avoid a lot of issues and ensure everything is aboveboard."

In the end, while inheriting property can be a blessing, it can also test family bonds. By planning ahead, communicating openly, and seeking professional advice, families may be able to turn potential minefields into opportunities for unity. After all, the true inheritance isn't just bricks and mortar—it's the legacy of family harmony that our loved ones would want us to preserve.

Realtor, TBWS

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