Property Inheritance – Who Gets the Family Home?
When a parent passes away, a home is often left as an inheritance to one or more family members. In addition to the sadness and emotional stress of the passing, there is now a new problem. What should the heirs do with the newly acquired property inheritance?
The home could possibly be retained as a residence for one or more of the heirs. Alternatively, they could rent it out and enjoy the passive income. On the other hand, they could sell it and cash out. At first glance, the options presented seem to be quite straightforward, and don’t seem to present much of a problem. The reality though may not be that simple.
Where a single beneficiary inherits, selling is often the option of choice
Acquiring a ready-made home through inheritance would seem to be an ideal scenario. Especially for a young couple looking to buy their own first house. In many cases, though, the likelihood is that they would be looking for a different type of property in another location that suited their needs better. They may want to be in a newer neighborhood, closer to their friends and to the schools where they’d like to eventually send their children. Selling and cashing out would then be the appropriate alternative.
Older, more established inheritors may well already own a house. In their situation, they would probably want to sell the property, generating cash to pay off an existing mortgage or to fund retirement savings.
What if there are multiple heirs to the property inheritance?
In the above scenarios the decision to hold or sell rests entirely with the heir to the property inheritance. But what if there are multiple parties to the inheritance? What if some want to hold and some want to sell? Is there a practical solution that can satisfy all parties without resorting to acrimonious legal fights?
Statistic show that in the majority of cases, inherited properties are more often left to multiple heirs. What happens then is that several people suddenly find themselves jointly owning the same property. Hopefully they will agree to a unified course of action that satisfies everyone.
Even when the property inheritance falls to siblings who have previously enjoyed a very close familial relationship, the new reality can be quite different. Human nature being what it is, things can quickly become quite complicated.
Financial priorities are rarely compatible between inheritors
Individual preferences may differ radically from one owner to another. Financial priorities based on their personal situations may be very different from co-heirs. One often hears the question posed: “What if my cousins want to keep the house as a residence, while my sister and I would much rather turn our shares into much needed cash?” Unexpectedly inheriting a residence is in itself a highly emotional experience. The needs and aspirations of individual family members can easily differ. The result can be conflict, which can often become quite bitter.
If the property inheritance happens to be a commercial site, even more issues could present themselves. Whatever the reality, the first thing to do in all cases would be to try and find common ground that satisfies everyone.
So where does one turn for guidance?
Whether the parties look to a financial adviser, lawyer or accountant, at the end of the day, a compromise that suits everyone still has to be found.
One of the inheritors may find the sell quick approach tempting and insist on a sale, while others may feel that the property market is too low and prefer to hold. Heirs may have spouses who do not see eye to eye with their partner’s other family members. This complicates the matter even further.
The unfortunate truth is that many families have been ripped apart, fighting bitterly over an inheritance. Many a lawyer has tales to tell of previously close relatives crying around a conference table, saying: “we never dreamed that this could happen to us”. Even marriages can come apart with spouses fighting over assets acquired by one of them from a will.
There is a solution though that can satisfy everyone.
With hindsight the problems outlined above could have been avoided.
Often it is possible by mediated discussion around the table to bring heirs to a common ground. Once this succeeds, they can hopefully agree to a unified course of action that will suit them all.
Even assuming that the heirs could not agree on whether to sell or hold, there is a solution that can still satisfy both approaches. This is the solution of choice offered by Inheritance Cash Out. ICO directly purchases the fractional interest of the parties wishing to sell, while still allowing the other heirs to continue holding. This process does not require the consent of the other parties, so in the event of an irreconcilable dispute you can still sell your individual share for cash.
ICO purchases partial real estate interest from as little as 1% to 100% of the estate. With years servicing heirs in nationwide purchases that include residential & commercial property and vacant land. This has made them one of the most trusted sources of “cash out” estate purchase options in the nation.
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