Leaving the family home equally to your children sounds fair. You have three kids, so each gets one-third. Simple, right? Maybe, until one child wants to sell, another wants to keep the house, and the third has been living there for the last five years and has nowhere else to go.
For families creating an estate plan in Calabasas, deciding who inherits your house deserves more thought than simply writing everyone’s names into the will. A home is different from a bank account. You can divide $300,000 three ways. You cannot neatly divide the kitchen, backyard, and primary bedroom into thirds. And once multiple siblings inherit a house together, decisions about that property generally become their problem to solve.
What happens when siblings inherit a house together?
When a parent leaves a house to multiple children, those children may ultimately become co-owners of the property. That means decisions have to be made about what happens next.
Should they sell it? Should one sibling buy out the others? Can one child live there? Who pays the taxes, insurance, utilities, and repairs while everyone decides? If all three children agree, the solution may be relatively straightforward. The trouble begins when they do not.
Here’s an example: Imagine that your home is worth $600,000. Your will leaves it equally to your three children. One wants their $200,000 share as soon as possible. Another loves the house and never wants to sell it. The third would like to keep it too, but cannot afford to buy out the sibling who wants cash. You have technically treated all three children equally. You may also have left them with a significant conflict.
Can one sibling force the sale of an inherited house?
Potentially, yes. Depending on how the property is owned and applicable state law, a co-owner who wants out may be able to pursue a partition action, asking a court to divide the property or order its sale. That can turn a disagreement between siblings into litigation, with attorneys’ fees, court costs, and family relationships all on the line.
This is one reason thoughtful estate planning should address more than who gets the house when you die. It should also consider what you actually want your children to be able to do with it afterward.
What if one child wants to keep the house?
This is where planning ahead can make an enormous difference. If you know one child is likely to want the home, your estate plan can address how that child might purchase the others’ interests. You may provide a right of first refusal, establish a method for determining the home’s value, or use other assets in the estate to balance the inheritances. For example, suppose you have a $600,000 home and $600,000 in investments. Leaving each child one-third of everything is not necessarily the only way to create a fair result. Depending on your goals and circumstances, one child might receive the house while the other children receive a greater share of the financial assets.
Equal does not always have to mean giving every child an identical piece of every asset.
What if one sibling already lives in the inherited house?
This can be one of the most emotionally difficult situations.
Perhaps your daughter moved in to help care for you. Maybe your adult son has lived in the house for years. You may assume your other children will simply allow that arrangement to continue after your death. They may. But an assumption is not an estate plan.
Your other beneficiaries may need their inheritance. They may not want to contribute toward property taxes and repairs on a house their sibling occupies. The child living there may not have enough money to purchase their shares. If you want a child to have the right to remain in your home for a period of time, or for life, that should be intentionally addressed in your estate plan rather than left for the family to negotiate after you are gone.
Who pays the expenses when siblings inherit a house?
This is another detail families often overlook. Even a mortgage-free home costs money. There are property taxes, homeowners insurance, utilities, maintenance, landscaping, and inevitable repairs. If the roof needs replacing six months after your death, who writes the check? If one sibling is living there, should that child pay all of the expenses? Should the costs be divided among the owners? What if one sibling refuses to contribute?
The longer heirs jointly own inherited property, the more opportunities there are for these seemingly small disagreements to become larger ones.
Should you leave the house to your children through a trust?
For some families, a trust for an inherited home can provide significantly more direction than simply leaving the property outright to several beneficiaries. A trust can establish who may use the property, how expenses will be paid, when the property may or must be sold, and what happens if one beneficiary wants out. This can be particularly valuable for vacation homes, multigenerational properties, family farms, or a home that you strongly hope will remain in the family.
A trust is not automatically the right answer, however. Sometimes the better plan is a buyout provision. Sometimes it is balancing the inheritance with other assets. Sometimes selling the home after death and dividing the proceeds really is the cleanest solution. The important thing is making that decision before your children are grieving and trying to make it for you.
We help families create estate plans in Calabasas that account for the people, property, and family dynamics behind the numbers. We invite you to call (818) 334-2805, and we will help you create a plan designed not just to divide your estate, but to make life easier for the people you leave behind.
Frequently Asked Questions
Can one sibling force the sale of inherited property?
In some circumstances, yes. A co-owner may be able to bring a partition action asking a court to divide or sell jointly owned property. The rules and procedures vary by state, which is why disputes involving inherited real estate should be discussed with a local attorney.
Can one sibling buy out the others after inheriting a house?
Yes, if the parties can reach an agreement and the purchasing sibling has the financial ability to complete the buyout. An estate plan can also be designed in advance to give a particular beneficiary an opportunity or right to purchase the property.
What happens if one sibling lives in an inherited property and refuses to sell?
The answer depends on ownership, the estate plan, and state law. If the siblings cannot reach an agreement, a co-owner who wants to sell may have legal remedies, potentially including a partition action. Planning ahead can reduce the likelihood that this type of dispute occurs.