While losing a loved one is hard enough, navigating the legal situation of probate afterward can sometimes cause additional pain, especially between siblings.
Though you can’t always avoid this situation, it can help to read and learn about what is expected during the probate period so you and your siblings can better focus on your grief.
Wandering through a will with an inherited real estate can be challenging, so it’s important to start by knowing what you can expect and understanding how this probate process works.
What To Know When Inheriting a House With Siblings
Inherited homes have a lot of responsibility and require proper communication between family members. Siblings often have different ideas of what they wish to do with the property, and all of the co-owners must come to an agreement.
There are options when there are disagreements, but those processes can often be pricey and lower the value of a home. As such, it is beneficial for you and your siblings to come to an agreement on your own. Once the probate process begins, you will need to discuss what direction you all want to proceed in when you inherited a house in TX.
It helps to understand the struggles and options you may face. You can sell the home or rent out of the house, then split the profits, or have one or more of your siblings move into the property. However, the first order of business is to take stock of the current state of the home.
First Tasks When Inheriting a Property
Your first task should be to handle current matters such as utilities, homeowners insurance, mortgages, outstanding debt or liens, and renovations will need to be considered. Splitting tasks between you and your siblings may help this process proceed more smoothly.
Look over the current utilities and subscriptions tied to the home and cancel anything that is not needed or wanted. You should transfer the necessary utilities to your or your sibling’s name.
As the new owners, it is up to you and your siblings whether you will keep the current homeowners’ insurance in your or your sibling’s name or if you will find another company that better suits your needs. Discuss this with the insurance agent if you’re considering selling the home.
If the home is being mortgaged, any loan payments are now your responsibility. Like homeowners insurance and utilities, you can transfer the account into your or your sibling’s name. However, you can refinance or sell the property outright if the current payments or interest rates are unfavorable.
While making these financial obligations, run a title check on the property. Doing so will give you and your siblings access to information on matters such as liens and outstanding debt. If such a check brings about new information, bring the account or accounts up to date. Then, depending on what information you discover, speak with a lawyer on how to proceed with the discoveries.
The final matter to consider is renovations. Whether you’re looking to keep the home, rent it out, or sell it, renovations may be necessary. Renovations will increase the market value of a home and make it more appealing to home buyers. Whether you’re selling or renting, this is beneficial.
Depending on the state of the home, you and your siblings may be able to make any necessary repairs on your own. However, it could also be to your benefit to hire a professional.
Options for Inheriting a Home With Your Siblings
Once you attend to these matters, discuss the future of the inherited home.
You and the other inheritors will need to openly discuss your feelings on this matter, financial obligations in conjunction with each option, and what is possible for you jointly. The best possible outcome would be for you all to come to a private agreement on your own.
With that said, review your options and how you could proceed as co-owners of a property.
Selling the Property
If you or one of your siblings are interested in selling the inherited home, there are several avenues to proceed.
If you and all the inheritors agree to sell, proceed with the normal process of selling a home.
If you’re looking into selling a house without a realtor, you should consider Four19 Properties. Four19 Properties takes on the sale of an inherited property in any condition without the assistance of a real estate agent and can sell a house fast in Texas.
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Following the sale of the inherited property, you and your siblings will be required to split the profits evenly and pay off the mortgage if applicable.
If not all agree on selling the property, there are still options to consider. One or more siblings can sign a Quitclaim deed, or interested parties can buy the shares of the uninterested siblings.
A Quitclaim deed is a formal document one signs that removes their name from the deed. Thus, the signer surrenders their ownership and any interest from the property. However, this does not remove their name from the mortgage.
The other option is a buyout agreement between you and your siblings. If one or more of your siblings do not want the property, and yet you do, this is a route to consider. Buying their share will grant you ownership of the home. However, buying your sibling’s share can be costly; you’ll need to secure funding.
Renting the Property Out
Renting a property can be both a hassle and a financial profit, so if you want to go this route, you should discuss this thoroughly with your family.
Renting requires a lot of work, maintenance, and upkeep. If you choose to rent out your family home, you will be required to renovate as needed and maintain it, which can be costly and time-consuming.
However, if you decide that renting works for you and your siblings, it can be a financial benefit. The rental income you receive will need to be divided between all inheritors. Before entering the rental business, draw up a formal written agreement between all parties concerning how you will split the money.
Although an even split is typical, if one person does most of the work maintaining the property, they might feel entitled to receive more compensation. A written agreement prepared beforehand may prevent issues in the future.
Keeping the Property
If you and your siblings decide to keep the home, you must agree on how payments will work. All co-owners will need to decide how to split the payments, how you will pay for your share of the property, and when payments will be due.
There are two types of ownership agreements: joint tenancy and tenancy in common.
Joint tenants are when you and your siblings hold an equal share of the property. Under this agreement, no one can transfer shares without getting approval from all of the individuals under this agreement.
Tenancy in common refers to an agreement when you and your siblings will share a title with property divided in an agreed-upon amount. Transferring shares is possible under this agreement with your sibling’s approval.
You can complete these agreements through a private arrangement between you and your siblings. Any agreement you come to needs to be in writing to avoid confusion and issues in the future.
Can You Reside in the Home?
Yes, if you and your family decide to keep the home, you can reside there. However, the decision on who will live on the property needs to be decided on by all co-owners.
You should draft a written arrangement for all parties to sign detailing who is to be living on the property, whose name will be on the title, whose name will be on the utilities, and who will pay for things such as homeowners insurance and property taxes.
Do You Need To Involve Lawyers When You Inherit a House With Siblings?
No, lawyers are not required for the probate process. If all co-owners agree on how to proceed, you can draft an agreement without paying attorney fees.
However, a probate attorney may be beneficial for you and your loved ones if you are unable to come to a decision.
Can Siblings Force the Sale of the Inherited House?
Yes, anyone holding any portion of ownership may force the sale of an inherited home through a partition action. A judge can order the property for sale if you can’t reach an agreement between the siblings. Anyone who inherited the property will have their co-ownership stripped away.
Following the forced sale of an inherited property, the proceeds from the property shares will be divided among all inheritors.
However, a partition lawsuit can be extremely costly. The judge will likely provide you with someone to facilitate discussions between the family, which you will be responsible for paying, along with any other services needed throughout this process.
Due to the costly nature of this venture and the heartache it can bring, leave probate court as a last resort.
Conclusion
Although inheriting a home alongside your siblings can seem stressful and overwhelming, there are several options for you all to consider.
Decide together whether you will sell the home, rent it out, or allow a family member to reside there. Discuss with your siblings if they’d like to remain on the deed, remove their name, or have someone buy out their shares. If all want to remain on the deed, discuss what agreement you’d like: joint tenants or tenancy in common.
If you can’t reach an agreement, reach out to a probate lawyer for legal advice.