Key Takeaways

  • Inheriting a house with siblings can be complicated and requires a plan for how to proceed.
  • One common solution is to sell the property and divide the proceeds among the siblings.
  • Alternatively, one or more siblings can buy out the other siblings‘ shares of the property.
  • It’s important to discuss the situation with your siblings and come to a mutual agreement on what to do with the property.
  • Consider getting legal advice from an attorney or a mediation from a neutral third-party to help navigate the process.
inherited property split between siblings

Inheriting a property from your parents with your siblings is a very delicate situation. The house holds many memories for each sibling, so there may be disagreements on whether to sell or keep the house.

Unlike inheritance money, splitting a house is not an easy feat. So, you and your siblings need to look for peaceful ways to resolve any differences.

In this complete guide, you’ll learn about your options when inheriting a house with siblings and ways you and your siblings can agree on what to do with an inherited house.

Factors to Consider When Inheriting a House with Siblings

Before deciding on what to do with a house you inherited with siblings, the first thing you and your siblings should do is run a check on the title and deed of the house. Any debt and liens on the home and property will impact your options, so you’ll want to enter the process with open eyes.

Before deciding what to do with the house, the first thing you and your siblings should do is run a check on the title and deed of the house.

-Doug & Andrea Van Soest

3 Most Common Situations When Inheriting a House with Siblings

1. Inheriting a House That Is Paid Off

Inheriting a paid off house is the most manageable situation. When the house has no mortgages, liens, or debt, transferring the deed to your names is much easier

Plus, you can sell it with fewer strings attached for greater profit.

2. Inheriting a House That Has a Mortgage

Sometimes siblings inherit a mortgaged house. You and your siblings are equally responsible for continuing regular mortgage payments when this happens. If you don’t make the payments, the bank will foreclose on the property.

Banks sell foreclosed properties for just enough to pay the remaining mortgage. This might mean you and your siblings end up with very little or nothing from the sale. Selling the house yourselves will give you the most profit.

So, keep the mortgage payments up-to-date while deciding on what to do with the property. If you’re not sure what you should pay, any outstanding mortgage will appear during a title check or a credit check on the previous owner.

3. Inheriting a House with Outstanding Debt

Mortgages aren’t the only possible debt on the house. Sometimes houses also carry contract work debt, liens, or second mortgages. You inherit these debts along with the property, so keep up these payments along with the mortgage payments while you figure out what to do with the property.

Learn More: How to Sell Your Inherited House Fast for Cash in California

Adding the Names on the Deed

I inherited a house, how do I put it in my name?

While you may have inherited the property, your names do not automatically go on the deed. You and your siblings must transfer ownership and pay appropriate taxes to have your names on the deed.

If you skip the deed transfer, resolving any disputes over the property will be much more complicated since you won’t be the legal owners. But completing the title transfer to your names gives you and your siblings more options for keeping, selling, and using the property.

To add your names to the deed, follow these steps:

  • Get a copy of the death certificate and a probate will – a will the court authenticated
  • Check the title for any stipulations, like other owners of the house
  • Draft a new deed with the help of an attorney
  • Sign the deed in front of a notary
  • File the notarized deed

Learn More: Can You Sell Your Inherited House in Probate?

inheriting property with siblings checklist

How do you split an inherited house between siblings?

Here are six options to consider:

1. Selling the House

The simplest solution is to sell the house together. That way, you’re dealing with the profit from the sale rather than trying to split the property.

The simplest solution is to sell the house together. That way, you’re dealing with the profit from the sale rather than trying to split the property.

Doug & Andrea Van Soest

To start the process, request a house and property appraisal to know what it’s worth. Then, you can work with a real estate agent to sell the property. Note that working with a real estate agent can sometimes be lengthy and expensive.

The average house sits on the market for 22 days, and real estate agents receive 6.48% of the sale. Then, you will be responsible for repairs and marketing costs to make the property sale-ready. Finally, you and your siblings are responsible for mortgage payments, taxes, debt, and maintenance during the sale period.

That’s why siblings often use a house buyer like SoCal Home Buyers. SoCal will send you an offer in as little as seven days. This means you can sell your house without hassle or extra costs and quickly receive equity you can split.

2. Owning the Property Together

If you and your siblings don’t want to sell, you can continue owning the house together. Just be sure there’s a formal agreement on what combined ownership looks like.

A few factors to consider include the following:

  1. Who takes care of maintenance costs and tasks?
  2. Who pays the remaining mortgages and debt?
  3. What can each sibling do with the property?
  4. Who will live on the property?

You have two primary options for owning the inherited property together: a joint tenancy agreement or a tenancy in common agreement.

In a joint tenancy agreement, everyone has an equal interest in the property and what happens to the property. For example, if a sibling passes away, the remaining part is divided between the other siblings. The other siblings also can’t sell their portion to anyone else without the other owners agreeing.

You can also co-own with a tenancy in common agreement. This agreement gives everyone either equal or unequal property ownership.

Unlike a joint tenancy, tenancy in common allows each owner to use their share however they want, including selling or transferring the share to someone else. Then, if a sibling passes, a tenancy in common share will go to the sibling’s heir rather than the other co-owners.

inheriting a home with siblings

3. Using the Property Together

You and your siblings might keep the house and use it as a vacation home if it’s in a nice location. Then, you can set a visiting schedule to split time between your siblings.

But, if you all want to use the house as a full-time home, you’ll need to get more creative. For example, you can renovate it into a multi-family home. Or, if the house is larger or has a split level with two separate entrances, two siblings can live together without any renovations.

Before choosing this option, check with your local zoning and permit requirements for multi-family homes and properties. Also, be sure to write up a formal agreement on how to split home and property costs and maintenance to avoid disputes in the future.

4. Putting It in a Sibling’s Name

What happens when one sibling wants to keep the property and the others want to sell? A buyout allows that sibling to purchase the property from the other siblings.

If one sibling wants to keep the property while the other wants to sell, consider a buyout where the sibling that wants to keep the house purchases it from the other siblings.

Doug & Andrea Van Soest

The buyout process is slightly different than selling a home normally. This is mainly because you skip the listing and marketing steps of selling.

Follow these steps to ensure a fair and equal buyout agreement:

  1. Value the house and property (including any belongings in the home)
  2. Find lenders to loan the buyout amount (look at trust loan lenders that understand inherited properties)
  3. Formalize the sale and transfer the deed to one sibling
  4. Split the sale amount between the remaining siblings

5. Selling a Share of Inherited Property to a Sibling

Finding a solution can take a while if too many siblings are involved. If that’s the case, one sibling might want to sell their share and let the others figure out the property between themselves. That way, you’re not responsible for any more payments and upkeep.

If your siblings agree, they can follow the buy-out process of evaluating the value and then paying you for your portion of the property.

6. Rent the House

The house is sentimental, so you don’t want to sell. But you also don’t want upkeep costs. Renting the house allows you to keep it in the family without the financial burden.

Rental properties earn a consistent income that pays for any leftover mortgage and upkeep costs. Then, you and your siblings can split the remaining profits.

If you rent out the property, you may want to hire a property manager so no sibling has to deal with the burden of managing the house.

Challenges That Might Occur when Inheriting a House with Siblings

While a peaceful resolution is your goal, sometimes conflict will arise. Here are a few common challenges that you might encounter:

1. A Beneficiary Is Living in an Inherited House

“What happens when one sibling is living in an inherited property and refuses to sell or move?”

The friendliest solution is offering to sell your portion of the house to that sibling. That way, the sibling that wants to live on the property can continue living there.

If your sibling doesn’t want to buy out your shares, you might reach a rental agreement instead. Then your sister or brother lives in the inherited house and pays fair compensation for residing full-time in the shared property.

2. Multiple Siblings Want to Live in the Same House

“What if multiple siblings want the house?”

Consider one of the previous options: turning the home into a multi-family home or splitting your time between the home as a vacation house.

3. Inheriting the House in a Trust

If someone inherits a house in a trust with their siblings in California, they may face several challenges. One potential issue is disagreements among the siblings about how to manage the property, such as whether to rent it out, sell it, or use it as a vacation home.

Additionally, there may be disagreements about how to divide the income or expenses associated with the property. The sibling may also have difficulty coordinating their schedules to make decisions or perform necessary maintenance on the property.

California law also has specific rules about how trusts are managed, and the siblings may need to consult with a lawyer or trust administrator to ensure that they are in compliance with these regulations.

Learn More: Everything You Need to Know about Inheriting a House in a Trust

4 Tips to Peacefully Resolve Issues

Follow these four steps to peacefully resolve disputes:

1. Listen

Take time to listen to each sibling’s reasons. For example, you might want to sell the property because it’s easier. Another sibling might be sentimentally attached to the house. Understanding and empathizing with those feelings keep the situation positive – even during a disagreement.

Mutual listening helps each sibling understand each other. You’re also more likely to find a mutually beneficial solution that doesn’t hurt anyone’s feelings.

2. Be Honest about the Process

Emotions will be high when dealing with an inherited house filled with memories. This can lead to disagreements or negative feelings.

Despite contradicting emotions, try to keep all siblings involved and informed no matter what you do with the house. Your relationship will last longer than the house, so investing in your relationship is more important than selling or keeping the inherited property.

3. Create Formal Agreements

No matter what you agree on, make sure all siblings sign a formal contract to document the agreement. A signed contract will protect each sibling’s feelings and inheritance.

As emotions change throughout the process, siblings might change their minds. A contract will keep siblings accountable and reduce the chances of someone backing out of the decision.

4. Require a Sibling to Sell

If you can’t reach a mutually beneficial solution, siblings can force a sibling to sell. Bringing the courts into the inheritance is the last resort. Consider this option if siblings won’t move out of a house, can’t agree on a sale, or disagree on how to split the house.

Selling a house through the court is called a partition. Filing a partition tells the court that you can’t reach an agreement, so the court takes the sale into its hands. When this happens, the court often sells a house for much less than it’s worth.

First, ensure you’re on the house’s title and the property as only legal owners can file a partition. That said, siblings would be far better off selling the house when disagreements arise.

Siblings would be far better off selling the house when disputes arise rather than losing out on some of their inheritance by filing a partition.

Doug & Andrea Van Soest

Sell Your Inherited Property Quickly

SoCal Home Buyers helps siblings sell their inherited homes quickly and as-is. There is no need to make the house market-ready or invest in listing and selling. Just contact us, and we will make you a fair offer. Get started selling your inherited home and have access to your funds sooner than later.

Learn More: Not Sure if You Should Sell? Pros and Cons of Selling

what happens when you inherit a house with a sibling

Frequently Asked Questions

In California, the process of transferring ownership of an inherited property is called a “transfer of death” (TOD) deed. This type of deed allows the property to pass automatically to the designated beneficiaries upon the owner’s death, without the need for probate. To transfer ownership, you and your siblings will need to sign a TOD deed and submit it to the county recorder’s office.

Unfortunately, disputes among siblings can occur when inheriting a property. It is important to have open and honest communication with your siblings about your plans for the property, and to seek legal advice if a dispute arises. A legal professional can help you understand your rights and options for resolving any disputes related to the inherited property.