What to do with My Inherited House? My grandmother was one of the most independent women I knew. She was up to the task of raising five kids in her 625 SF house after my grandfather died in WWII. Fortunately for her heirs, there was no question as to who owned the inherited house or what her intention was on disposing of that asset from the estate. However, many are not so fortunate.
Many Heirs
A property handed down for several generations often has many heirs attached to it. Finding multiple heirs for an inherited house can be a daunting task. Each party must sign off on a resolution of the property or sometimes the courts must dictate a solution. The process is further complicated if grievances exist between parties. We’ve seen the result of contested heirship, and it’s not pretty. Here are some tips for dealing with multiple heirs:
Title Issues
You can’t sell a house until title issues are resolved. The most common cause of confusion in title disputes after a property owner dies is the lack of a will.
Without a will, a property will generally pass to multiple owners. This is called “heir property ownership.” The house is owned “in common” by all the heirs, regardless of whether they ever live in the house, pay the taxes, or have even set foot in the house. Further, when a house is passed down from one generation to another, the number of interest holders multiply. This increases the chances that the heirs do not:
- live on or near the land
- live near each other
- know one another
- have the means to locate one another
- have any connection to the land
The more heirs that appear, the more likely you are to lose the opportunity to buy the home or to keep the home if you are an heir. Also, you will face higher costs in time and money. Here are three methods to help avoid that.
Solutions for Selling an Inherited House with Multiple Heirs:
If you are obtaining an inherited house with other heirs involved and there is no will, there are ways to own the property without increasing the amount of interests over time. These are the three primary solutions:
- Buy out the other owners
With multiple parties interested in a property, it is common that they will have different desires for the same property. Some will want to sell, and some might want to hold on to the house. If you want to be the sole owner of the property, you might consider trying to buy out the share of your co-heirs. This option is the most common when one heir has more of a special affinity or attachment to the home than the others.
- Partition the property
If it’s land, another option is for the heirs to subdivide and partition the property. Each partition is then converted to sole ownership. This is an attractive way to take the heirs out of the heirship cycle. Each person gets sole ownership (of something), which is much better than joint possession. Some legal maneuvering may be required to work out details such as access and mineral rights.
- Sell the property for cash and distribute the money among the heirs
A third option is to turn the inherited house into a liquid asset: cash. The executor simply prepares the house for sale on the traditional market. This usually allows the heirs to receive the most from the proceeds. But any time multiple heirs are involved, a lot more time, money, effort, and communication is involved. As always, a quick closing also means a discount price.
Many people choose to sell the house to an investor. This is an attractive solution when heirs don’t have the time or the money to fix up the house for sale. This was true for one of our clients in Houston. Our client was the primary caretaker and had the wisdom to line up the assets as his mother’s health declined. He simply sold the home and distributed the proceeds to his siblings. Not wanting to spend the time or the money on the tired house, he sold to us and we did a rehab of which his mother would have been proud.
We Can Help with Your Inherited House
Regardless of the situation that you find yourself in, if you face issues with inherited property, we likely have some experience which can help you. If we need to contact our probate or title attorney for help, we are glad to help you out. Contact us at (281) 738-3898.
Disclaimer: Above we speak of what happens when property passes down without a will. For any particular situation you may face, we advise you contact a probate attorney.