Most parents prefer to split their assets equally in their will, leaving no room for fights to breakout over which child should get what. When it comes to the family home, however, things can get hairy. The best option would simply be to sell the property and divide the cash. But, selling inheritance property presents emotional, practical, and logistical difficulties.
Going through Probate
Before selling an inherited property, it should undergo probate first. Most states grant summary probate, which expedites the procedure and won’t take a lot of time or need legal counsel. Yet, this is only valid for small properties that value from a thousand dollars to a hundred thousand dollars. The majority of properties surpass this threshold, so you’d have to wait for the regular probate process to finish.
Afterwards, the court will then provide the will’s executor the authority to divide the assets and settle outstanding debts. If you’re the executor, you’ll need to seek authorization from your siblings and the court to sell the property.
Agreement to Sell
If everyone agrees to sell the property, the executor can request the court to consent to the sale. Most difficulties happen when some of the siblings want to retain the property, while others don’t. In this case, you’d have to make a deal with your siblings. Those who want to keep it can just purchase the other siblings’ interest in the estate.
There will also be instances when selling is the only way to clear the debts of the property. In this instance, the courts will overrule the disagreeing sibling or siblings.
When selling your inherited property, your tax basis for the estate is the worth of the home on the day your parent or relative who willed it to you passes away. The remainder between the sum you got from the sale and the value is the gain on which you owe taxes. However, if you sell the property for less than its value or the exact amount, you won’t have to report a gain.
Selling an inherited property with your siblings doesn’t need to be a messy, relationship-damaging affair. Be prepared and seek professional assistance to get the best result for everybody involved.