When a parent or relative dies, he may leave several heirs who jointly inherit his entire estate, including any real estate. Without a provision in a last will and testament specifying which heir gets what property, the real estate will be inherited in undivided interests to be held by the heirs generally as tenants in common. Any change in ownership of the inherited property will either be by agreement of the heirs or by court order, subject to the terms of any will.
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Sale by Executor
Most wills direct the executor to pay debts against the estate first before distribution of assets to the heirs. If a purchaser is obtained for the property, the executor may be forced to liquidate to pay estate creditors before distributing any remaining proceeds to the heirs as directed under the will. If the will grants the executor the power to sell the property and all heirs agree, the executor may also execute a deed to a third party even if there are no debts owed and distribute the proceeds to the heirs.
Sale by Agreement
All heirs may agree to deed their interest in the property to one of the heirs who wishes to acquire the property. The heir purchasing the property may agree to pay the others their share by mortgaging the property or exchanging his interest in other estate property.
An heir who doesn’t wish to receive any property from the estate may agree to disclaim his interest in the property within the time allowed by law after an estate is filed. The filing of a disclaimer in the estate is an heir’s way of declining his inheritance as it pertains to specific property or all of the property, depending on his intent. If too much time has passed, an heir will usually be required to deed away his interest in order to terminate joint ownership.
If the heirs can’t agree on how to divide the property, the court may intervene upon being asked to do so by one or more heirs. The court may order a survey to divide the property into parcels, one for each heir if there is a large tract of land, or it may order a sale of the property to a petitioning heir or to a third party with the cash proceeds being divided among the heirs according to their respective interest.