If you are named as a beneficiary for your parents’ home in their Last Will and Testament or Trust, the transfer of the home to you upon their passing is pretty much a cut-and-dry process. However, if you and your siblings are named as beneficiaries, things can get dicey if none of you can agree as to what to do with the property. You may want to sell it. Your sister may want to keep it in the family. Your brother may want to rent it out. Despite any disagreement, inheriting your parents’ home doesn’t have to turn into a war with your siblings.
Check the Terms of the Will or Trust
The first thing you need to do is check your parents’ Last Will and Testament or Trust. What are the terms about splitting the home among you and your siblings? Is it evenly divided? Does each sibling receive a certain percentage? Are there instructions regarding selling or keeping the home?
The Executor or Trustee must follow the terms in the documents. If there are no specific instructions, it’s up to the discretion of the Executor or Trustee as to how the property is handled.
If the home was listed in a Will, it must go through probate. If the property was held in a Trust, probate is not involved and the home transfers directly to the named beneficiaries.
Inheriting a home is huge and important decisions must be carefully made. Consider the financial situations of you and your siblings. Are you and your sister/brother able to afford such an inheritance? If you want to buy out a sibling’s share of the home, do you have the financial capacity to do so? Does the home still have a mortgage? If so, how will it be paid off? Would you or your siblings assume the mortgage?
Before making any rash decisions, have a serious discussion with your siblings. The goal is to come to an agreement based on what is best for everyone.
How to Split the Inheritance of Real Property
Dealing with Inheritance Tax
Inheriting a Co-Owned Home
Let’s say your parents left you and your brothers and sisters a vacation home they co-owned with someone or owned in a Trust. That third party’s share would have to be bought out, or, they would have to buy out your interest. If the co-owner refuses to sell, you and your siblings could file a partition action. However, you can only file it if the Executor or Trustee has transferred the property title to you and your siblings. If you do not have the title, you legally cannot file a partition.
A Will or Trust is a Must
If you keep your inherited home or share ownership of it, you still need to protect it, yourself, and your family by creating a Will or Trust. Avoid heartache and legal hassles by creating a complete estate plan with Gentreo. We’ll walk you through the process and stay with you as life changes.