Inherited Property – Force the Sale?
When you inherit a property jointly with your siblings, you have to figure out what to do with it. The simplest thing to do is selling and distributing the proceedings equally or as stated in the trust or will. But often, this is a case of divisions if siblings cannot agree among themselves to sell, and without help from the court, one sibling shouldn’t be forced to sell the property against their will.
Can Siblings Force the Sale of Inherited Property
Inheritance usually comes at a challenging time when a loved one has died, and those properties usually hold sentimental value. You’d be wise to work with an attorney familiar with such situations to avoid alienating a sibling for good.
An inheritance is a property that passes down to an heir when the owner dies. The heir can be the owner’s kids, favorite charity, and so on. Inheritance usually involves probate. Probate is a process where the executor, usually a family member or close friend, settles the deceased’s affairs and distributes their assets to the beneficiaries and heirs. If there is no will, the executors are appointed by the court, and they must include the names of any heirs in their application to serve as executors. A Trust, on the other hand, does not go through probate.
What kind of ownership can result from inheritance?
The kind of ownership resulting from inheritance depends on the trust or will. It can either be as tenants in common or a joint tenant. In the case where there’s no trust or will, it’s a tenant in common.
What to do when you inherit a home
When a property is passed down from one person to you through will, trust, etc., the extent of your powers depends on the nature of ownership. In joint tenant ownership, you will have to cooperate with the fellow owner(s) and make joint decisions. On the other hand, if you are tenants in common with your siblings, you have your share of the property and can do with it as you please.
Can the majority force the sale of inherited property?
The answer is not; without going to court, they can’t. Even if it’s only one sibling against the sale, they still have rights, so the others should let the probate court decide. If the court favors the sale, it may appoint a third party to list the property and split the gains after settling any involved fees. The property may be sold in private or public. The sibling not in favor of the sale can offer to buy the property from the rest.
Going to court is not the only option; in fact, it should be a last resort. Joint inheritors of a property can always reach agreements outside court.
These could be:
- Agreement to rent the property and share profits
- One sibling agreeing to rent the property of another
- One sibling deciding to buy the other’s share of the property
- An agreement to postpone the sale and wait for a better price
The tax implications of selling an inherited property
Unlike selling your home, which attracts capital gains tax, selling an inherited property only charges a step-up tax. It’s usually based on the difference in values between the selling price and how much it was when you inherited it. Of course, the main reason some may want to sell right away is to minimize the tax amount. Doing repairs increases its market value and, therefore, taxes.
Tip: Due to Proposition 19, it is highly recommended to speak with a trust attorney.
Need help dealing with the inheritance probate process?
An inheritance can be a blessing, a curse, or a little bit of both. You need the help of experienced attorneys to figure out what to do and stay on the legal side of things. For assistance with the inheritance probate process, don’t hesitate to speak to our professionals. We are experienced estate attorneys in California and will help you comprehend the inheritance process and your rights as an heir or beneficiary.
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