Inheriting Land with Siblings: A Step to Step Guide

Inheriting land with siblings has been a query for many, but here I have given you a go-to guide.

An image of a land fenced
Green land. Photo Courtesy: Instagram

Several siblings can inherit the same property from their parents or someone else.

This typically occurs when the property owner, often a parent, creates a will or trust that specifies that the property should be shared among the siblings.

If a will or trust states that you and your siblings should each receive equal shares of a property, all of you have the right to use and enjoy it once you have legal ownership.

However, in many cases, it is not practical for siblings to jointly use and enjoy the property, so an agreement may need to be reached on how to divide it.

Inheriting a house with siblings is not only complex in terms of dividing the property but also in terms of managing family relationships.

In essence, family ties could be strained indefinitely if the proposed plan is not agreeable to one or more of the siblings.

While it is not always possible to completely avoid conflict when dividing property among siblings, there are ways to minimize it.

What happens when one sibling is living on an inherited property and refuses to sell?

What happens if one sibling inherits a house and doesn’t want to sell it while the other siblings or co-owners want to sell?

The other owners might take legal action called a partition to force the sale.

Normally, people cannot be forced to keep a property they do not want, but they can be made to sell it.

However, going through a partition can be costly.

It is a good idea for the co-owners to talk about other options first.

For example, the sibling living in the house could pay rent to the others, or maybe they could work out a deal for the sibling to buy their shares of the property over time.

It is worth noting that there were changes to California partition laws in January 2023, which could impact the rights of co-owners, especially when the property is considered “heirs’ property.”

If siblings inherited the property together, it likely falls under this category.

How to Transfer Property with Survivorship Rights After Someone Passes Away

When someone dies, property held in joint tenancy, tenancy by the entirety, or community property with the right of survivorship automatically goes to the surviving owner.

This includes real estate, bank accounts, vehicles, and investments, and it happens without the need for probate.

However, even though the survivor now owns the property, it is not officially recognized until they “clear title” to the property.

Clearing titles usually involves filling out some straightforward documents and submitting them to the relevant office or agency.

If you are named as an executor in a will, joint tenancy property is not directly under your control, as it does not go through the probate process.

But, in practical terms, you might find yourself both an executor and a surviving joint tenant.

In such cases, you may have to take steps to clear the title to the joint tenancy property on your own or assist a family member in doing so.

Transfer of property between siblings

We live in a world where brothers and sisters usually do not agree on everything.

Add to that the sadness of losing someone we love, and things can get even more challenging.

Getting a house as an inheritance can be a good thing, but if you are inheriting it with a brother or sister, it can also bring up tough feelings and cause stress—both in money matters and emotions—for everyone.

If a will does not specifically say something else, inheriting a house with siblings means that each sibling gets an equal share of the property.

The brothers and sisters can talk about whether to sell the house and split the money, if one of them will buy out the others, or if they will keep sharing ownership.

How to buy out a sibling on shared property

If you and your sibling agree on a buyout, it is easier.

You give them money for their share, and they sign over the property to you. You can also get a loan for half the property value if you’re okay with taking on the debt.

If a loan is not possible, make a private deal. Write down in a contract how much you will pay with interest and set up monthly payments until it is all paid off.

You will also need a deed of trust to make it official.

If you are buying the property from your siblings, you need cash.

Regular banks might not give a loan for a property to other owners. Look for lenders like United Farm Mortgage for help.

They pay the money to the siblings selling, and the one keeping the house takes over the loan.

The interest may be higher, but it’s quicker to get approval. You might need some cash because probate loans cover up to 70% of the property value.

The lender decides the funds and terms. After refinancing, the property title goes to the sibling who buys the rest.

If you want to keep the property but your siblings want to sell, you might have to sell if you can’t agree.

A sibling can take you to court to force a sale and split the money. Your house goes up for sale through an auction or a real estate listing. You can bid on it or make an offer.

Real Estate

For real estate, a court is needed. Either you all agree or the court decides. If you are buying your siblings’ shares, you need cash.

Trustworthy companies like United Farm Mortgage offer loans to protect your assets.

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