Stories about adult siblings fighting over an inheritance aren’t just everyday occurrences – they’re making headlines.
Witness the ongoing battle over the media empire of nonagenarian News Corp mogul Rupert Murdoch, involving his sons, Lachlan and James.
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But sometimes, stories of internecine conflict can hit home – literally.
In an anonymous Reddit thread, someone described how his mother, who died in 2018, left him and his two brothers behind.
The Redditor claims that he bought his siblings just to witness them spending money on big-ticket luxury items.
Last year, she and her husband sold the house, but it nearly tripled in value. Now, his brothers want to reduce their income. “My two sisters think I owe it to them to share the profits I make,” he wrote. “It has become toxic and most of my family is on their side.”
The Redditor insists that he did everything with the book, so why did his relatives throw the book away – and who is in the right? Fortunately, there are some tips on how to navigate property inheritance between siblings.
The key to successful estate planning
Estate planning is more than a legal document – ​​it also includes special considerations for family dynamics.
This gives you the opportunity to clearly explain your wishes and outline all financial, medical, and personal decisions. This can help your loved ones avoid conflict and confusion down the road.
But according to a 2023 study by LegalShield, almost 60% of Americans do not have a will – this, despite the fact that 90% of people surveyed recognize the importance of making a will.
This brings up the main problem you will find referenced time and again by estate planners and lawyers: communication.
Ideally, close family members come together for an open and honest discussion about your loved one’s estate plan. This gives everyone an opportunity to ask questions, voice concerns, or ask for clarification.
These discussions can be done one-on-one or in small groups. If there is still disagreement, a financial professional can step in to help resolve it.
What to consider when inheriting property with siblings
Inheritance of property with siblings is not always a continuous process, even if the provision is outlined in the will. For example, what if one brother refuses to sell?
It is not uncommon for there to be disagreements between siblings about how to divide property.
According to research from Ameriprise, while only 15% of siblings argue about money conflicts, of that group, 68% of money disputes are related to parents – including wills and inheritances.
So, what are some steps you can take to help navigate this transition with your sibling?
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Request an appraisal on the property
Although not necessary, getting an appraisal can help you evaluate (and prove) the property’s value to the IRS when inheriting.
The appraisal will also factor in similar property sales, market trends, and home details – including size, condition, and amenities.
This can be helpful in helping you and your siblings decide what you want to do with the property. For example, you can sell and split the money equally or convert it into an income property and split the rental income.
Another option is to stay as a family vacation home. In some cases, one sibling may want to stay there for a while.
Request post-inheritance arrangements in writing
Even if you’ve made an agreement to divide your real estate assets, the Reddit example above shows how a dispute can make a verbal agreement worthless.
Experts emphasize that, after selling a property, you want a legal document that states that the transaction is final and that other family members cannot seek benefits in the future after the fact.
If everyone is on the fence about what to do with the property, consider the following questions:
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Does the house still have a mortgage?
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What repairs/maintenance should be done before selling?
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What are the additional annual costs of housing – and who pays?
QuickenLoans encourages family members to “keep organized records of all terms and agreements of sale, which can prevent misunderstandings between parties.”
Hire qualified experts
Estate planners, probate attorneys, and independent executors can help siblings figure out how their property will be divided and sold, whether it’s to each other or to an outside party.
In cases of extreme sibling disagreement, hiring the same bank or institution as the executor of the estate “often helps to avoid competition and bitter disputes between family members,” according to attorney H. Van Smith.
Having an attorney present can help prevent conflicts from escalating, as well as help you reach a solution that works for everyone. In the end, having a third party can only save you.
In the end, you can sell your house and make a tidy profit, but it’s not the same as making an amicable deal with your siblings.
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This article provides information only and should not be considered advice. This is provided without warranty of any kind.