Inheriting A House With Siblings
Options For Inherited Property With Multiple Owners
If you and your siblings have recently lost someone close to you, and they did not leave a Will or any direction for how their property should be distributed, then you may be left wondering what to do with the inheritance. Inheriting a house with siblings can be complicated, but the process can be much easier if you know what to expect before getting into it.
You’ve Inherited A House With Siblings — What’s Next?
The process can be overwhelming if you inherit your loved one’s home. This is especially true if you’re still grieving over the loss of your family member, so it’s important to take some time for yourself to deal with everything that is going on beforehand. Once you’ve taken the time to do so, you and your siblings can now approach the property inheritance situation more clearly.
5 Tips When Inheriting A House With Siblings Before Getting Too Deep Into Property Changes
Have A Family Meeting
Gather your siblings and other family members to discuss the property inheritance situation. You should discuss each beneficiary’s role and what they would like to happen to the home. It may be easier if each family member is assigned a responsibility. For example, task one person to handle the legal aspects of the estate and one person to begin sorting out the home.
Manage Utilities And Insurance
You should begin the process of unsubscribing or canceling any unnecessary bills. For example, cancel any cable services or magazine subscriptions. If there are any necessary utilities, you should try and transfer them into your or your sibling’s names. For the home insurance, you and your family should consider if you would like to find a new insurance policy or if you would only like to transfer the policy into someone’s name. When transferring the policy, you should inquire about any timelines you should be aware of if you plan on selling the home.
Decide What To Do With Belongings
Speak with your siblings to see what you should do with items not mentioned in the decedent’s Will. You should also figure out what items family members want to keep. For example, someone may want to hold onto sentimental items like a family antique. When it comes time to eliminate unwanted items, an estate sale may be a good choice. Once the sale is complete, the money can be transferred to the estate and split between the beneficiaries.
Make Necessary Repairs
Inspect the home as it is and look for things that may need to be repaired now or down the line. Look out for any leaks or other critical issues. Hiring a professional may be a good idea to give you an idea of what needs to be fixed.
Run A Title Check
It’s a good idea to run a title check on the property before you begin transferring or selling the title. This will confirm if there are any outstanding bills or liens on the property. If there is anything on the title, you should pay the bills and speak with a lawyer to find out your next step.
Options When Inheriting A House With Siblings
In a majority of property inheritance cases, a property is being passed to multiple people, so everyone will generally have an equal share unless the Will says otherwise. Since everyone has an equal share in the home, there may be some disagreements about the home, which may become complicated. Below you will find options for what to do when your family can and cannot reach an agreement regarding the home.
When You Agree
When you’re inheriting a house with siblings, and you all agree on how to divide the property and other assets, you should create an agreement that states the amount each person will pay for the property, how they intend to pay it, the terms of the payment, etc. These agreements are good options when no one in the family qualifies for a mortgage. Keep in mind that all agreements should be in writing.
When You Disagree
If there is a disagreement between siblings, there is a possibility that you will have to take the case to court, and a judge will end all property ownership and order the property to be sold. The court may assign a third party to assist with selling the property.
If you and your siblings choose to go with the third party, then you will be responsible for paying the person and anyone else who assists you in the process. This will reduce how much each person will receive from the sale and may make the property less valuable.
Buying Someone Out When Inheriting A House With Siblings
If you or one of your siblings decides they don’t want to be a partial property owner, they can be bought out by another family member. If you or another sibling wishes to be the sole property owner, then the person who would like full ownership must get funding to buy out the other’s share of the home. A majority of third-party lenders don’t give loans if the property has multiple owners, so you may need to get special funding.
To determine each heir’s equity in the home, you will likely need to determine the property’s current value by having a third-party appraisal. Once the appraisal is complete, remove the cost of any debts against the estate and divide the remaining amount amongst the property co-owners. The amount you end up with is how much each co-owner’s share is worth and how much each person must pay if they want to buy out other co-owners. When you come to an agreement, make sure it is in writing and try to have a witness if possible.
Once you bought your sibling’s share of the property, the home is now yours. You can now transfer all utilities, titles, and insurance into your name. You may also be able to refinance the home’s mortgage. This process is similar if you’re selling property to a sibling.
Options For Inherited Property With Multiple Owners
When it comes to you and your siblings taking on co-ownership, there are a few options. You can sell the home and split the proceeds, rent out the home and split the income, or even keep the home and let family live in it.
Before you jump into any decisions, there are a few things you and your siblings should consider:
- The condition of the property
- The cost of any repairs now or in the future
- The property’s appraised value
Where you and your siblings currently live
- Any property needs that may be in your family
- Any sentimental value
Selling and Splitting the Profits
If the area has a strong real estate market, then selling the home may be a good option for you and your siblings. If there is no mortgage to pay off, then you’ll have more equity in the home to split between all the heirs. Remember that your family will have to pay closing costs, commissions, and other real estate fees. If you wish to have more control over the sale, you can list the home as for sale by owner. If you’re looking to get rid of the property quickly, you may be able to sell the home to an investor, depending on the location and type of property. Though, you may get less money for it. If the home still has a mortgage that needs to be paid which costs more than the market value, then you should speak with the lender to discuss a short sale.
Renting And Splitting The Income When Inheriting A House With Siblings
Inheriting a house with siblings may mean that you keep the house in the family. You may want to use it as a vacation home or as an extra place to stay for any family that may need it. If this is the direction you choose to take, make sure your arrangements are in writing, and ensure everyone is included in the title and utilities. You should go over maintenance, property tax, and other recurring costs and responsibilities with your siblings.
Keeping The House In The Family
If an estate is worth less than $24,000, there is a simplified process that can almost entirely bypass the Probate Court Process. In general, this type of Probate is shorter than the others and usually doesn’t require the help of an attorney which both help reduce the cost.
3 Tips For Sharing A Vacation Home When Inheriting A House With Siblings
If you plan to share an inherited house with siblings as a vacation home, consider using the following steps to make the process as straightforward as possible:
Consider Creating An Expense Account
An expense account may be a good idea if you own a home with multiple people. It’s not required, but it is a good way to ensure all co-owners contribute equally to the home for any mortgages, maintenance, renovations, etc. Also, if you rent out the home, it will help you keep track of any income you receive from the property through renters.
Consider Hiring A Property Manager
If you don’t live near the property, hiring a property manager may be a good idea. The property manager is typically in charge of general upkeep, taking care of any repairs, and communicating with renters. The cost of the property manager would be split between the co-owners.
Consider Creating A Governance Board
If there are multiple property owners with the possibility of other potential owners down the line, creating a governance board may be a good idea. More owners mean more possibilities of conflict on what to do with the property. If you create a governance board, it can cut down how long it takes to come to a decision and take any pressure away from family members. This process is similar to a condo board.
Final Thoughts When Inheriting a House With Siblings
Inheriting a house with siblings may be a great thing, but you may not all come to an agreement on everything. Even if you believe you and your siblings are on the same page about the property, someone may have changed their mind and ruined all the plans. To keep away from any disagreements, consider the following tips:
- Make sure all agreements are written and witnessed if possible.
- Consult with a lawyer or other professional if necessary
- Consult with friends that can give unbiased advice
- If emotions are running high, take a step back before getting into any unnecessary arguments with family
Inheriting A House With Siblings That Needs To Go Through Probate?
If you need to go through the Probate process, it is recommended that you work with an experienced Michigan Probate Lawyer.
The Probate process in Michigan can be complicated, long, and confusing.
An attorney can help you quickly and easily navigate the process so that your loved one’s money and property can be distributed to their heirs in the manner in which they intended.
At Rochester Law Center, our compassionate and dedicated Michigan Probate Lawyers are experienced in all matters of Probate Administration and serve every county in the state of Michigan.
We make Probate fast, easy, and stress free by acting as your guide through the complicated paperwork and legal proceedings you’ll undoubtedly be facing throughout the Michigan probate process.
We understand the intricacies and nuances involved with Probating an Estate and can help you navigate every step of the way while keeping costs as low as possible.
Call us today at (248) 613-0007 for a free case evaluation.