Inherited A House, Now What?
When siblings inherit their parent’s house, the issues surrounding what to do with it are numerous. One sibling may wish to keep it, and one may wish to sell it. There are many complications attached to inheriting real estate and much of it depends upon how the property was passed and the children’s intentions regarding the property.
If the mother or father didn’t have a will (died intestate), the title to the real property will pass immediately upon death to the heirs. The administrator of an intestate’s estate doesn’t have the power to sell the real estate. Although the heirs aren’t personally liable on the property’s mortgage, in reality, they should make payments so they do not risk foreclosure on the property. They should also pay the real estate taxes and keep insurance on the property.
To sell the property, all heirs have to agree and sign the deed conveying the property. Sometimes this is not easy because heirs are out of state, some may want to hang onto it for sentimental reasons, or perhaps one child is currently living in the house. In this case, it may be necessary to file a partition suit where one or more co-owners requests to purchase the interest of the other parties.
If the parent had a will, he or she likely provided instructions regarding the disposition of the real property. The will may contain a provision granting power of sale to the executor. If the executor sells the property, he will distribute the net proceeds to the beneficiaries in accordance with the will’s provisions. Prior to the sale, the executor typically makes the mortgage payments and pays insurance and real estate taxes from the estate assets.
Where the will provides for no power of sale to an executor, he can petition the court for an order granting him that power if a sale would benefit the estate. Also, if the beneficiaries or heirs all agree, they could appoint an agent to sell the property.
The real property left behind is subject to the claims of the decedent’s creditors. While personal property is usually sufficient to satisfy the creditor’s claims, sometimes the property needs to be sold to satisfy the decedent’s debts. In that case, an executor with the authority to sell the property should do so.
The issues surrounding inheriting real estate are many, and consultation with an attorney can often be beneficial.