When multiple siblings inherit a home, everyone receives a share of the property, meaning everyone shares responsibility for it. As a result, all siblings divide the property tax, mortgage payments, necessary maintenance to the property, and any other expenses that may arise. When you factor in the emotional stress that comes with losing a parent, this could be overwhelming. Because of this, you may be the only sibling interested in keeping the house, whether it’s for sentimental purposes or for other financial goals. This is when understanding how to buy out a sibling on shared property you inherited is essential to ensuring you hold onto your inheritance. While it may seem simple, accomplishing this process fairly and amicably requires expertise and tact to preserve family ties.
At Gokal Law Group, we have helped countless siblings navigate this emotional chapter to reach a solution, such as a buyout, that satisfies all parties involved. Through Alternative Dispute Resolution (ADR), you can better preserve your relationship with your siblings when you need each other the most. Here’s when heirs do and don’t have to agree to sell jointly inherited property.
How to Buy Out a Sibling on Shared Property We Inherited
If you are the only one interested in keeping the property you inherited jointly, buying out your siblings could be the only solution. This involves your payment to them for their share of the property. In exchange, they forfeit their stake in the property. Let’s get into the details.
Related Article: Can a Trustee Buy Property from the Trust in California?
Get the Property Inventoried and Appraised
The first part of this process is determining the estate’s value. Remember that any contents in the home are also factored into the estate’s value. For this reason, it is imperative to have everything in the house valued by certified estate appraisers to calculate the true market value of the home. An accurate appraisal will ensure the other beneficiaries receive a fair payout and help you avoid potential litigation.
The valuation will also give you an idea of how much money you’ll need if you are considering buying out other beneficiaries, and it will help determine if you need a loan or not. We advise doing this before talking with other beneficiaries for a few reasons.
Knowing how much the property will cost is a good way to determine if purchasing it is feasible. The other beneficiaries may also be more agreeable if you provide concrete numbers and demonstrate you have a plan in place to ease this process.
Related Article: The Emotional toll on Siblings contesting a Trust in California
See if You Can Reach an Agreement with Other Beneficiaries
After getting an appraisal, it’s important to talk to the other beneficiaries. If you can come to an agreement together, this is the easiest way to resolve the situation. It’s important to never assume you know what your siblings are thinking. Talk candidly about your plan to buy the house.
Once everyone has agreed to sell you the property, you can proceed. If you are ready to pay your sibling in cash for their shares, you can do so after reaching this agreement, and with the help of an attorney, they will sign over their part of the property to you.
If you have inherited a sizable amount of money from the estate, this could be a huge help in purchasing the property outright. Working with mediators can also be a great way to devise creative Alternative Dispute Resolutions that will satisfy everyone involved.
But if you don’t have enough liquidity to complete the purchase at that moment, the next step is securing financing for this property.
“After the loss of a loved one, it is normal for tensions to rise and situations to get murky. Old sibling rivalries can easily resurface and make the other beneficiaries think that a sibling buying them out has ulterior motives. Getting professional help with mediation helps reach the best possible outcome for everyone, which can streamline the process and minimize costs when considering the potential for litigation. It will also ensure that you and your siblings can be there for each other when you need each other the most.”
– Andrew Micaraset, Associate, Gokal Law Group
Related Article: Taking Siblings to Court: Can Siblings Force the Sale of Inherited Property
Find a Loan Lender
Unless you have quick and easy access to large sums of cash, you will likely need to take out a loan to buy out the house from your siblings.
You will need a loan from a lender who specializes in probate or trust loans because the estate is still technically owned by your parents even though they have passed away. Keep in mind that the type of loan you get also depends on how your parents structured your inheritance.
Related Article: What to Consider When There Are Siblings Contesting a Trust in California?
Consider Other Inheritance Loans and Refinancing Options
If you have difficulty getting a probate or estate loan, you still have financing options available. Other options include a home equity loan, money lender loan, refinancing, cash-out refinancing, and inheritance loans. Ultimately, the best way to determine your available financing options is by speaking with a professional in matters involving estates.
Related Article: What Should I Do When There Are Siblings Contesting a Trust?
Do You Need Expert Guidance Buying Out a Sibling on Shared Property? We Can Help You Navigate this Process!
Have you recently inherited property with your siblings? If you want to hold onto this property while others want to sell it, then learning how to buy out a sibling on shared property is essential. This process can be confusing, but we are here to help you navigate it. Whether you are having trouble maneuvering through this situation or are encountering legal challenges due to uncooperative beneficiaries, trustees, or executors, working with an attorney is essential throughout this process to safeguard your inheritance.
Visit our Contact Page to schedule a consultation for expert help during this process.
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