Problems With Selling the Property of an Heir

By John Cromwell

Traditionally, an heir is defined as a person who receives property from an estate due to intestacy. When a person dies without a valid will, the intestacy rules of a state provide how the estate will be distributed. Generally, the intestacy rules distribute the estate to the decedent’s surviving spouse, children and close relatives. Heirs’ property is parcels of land that are transferred to heirs through intestate. This land is co-owned by multiple heirs as tenants in common. Common examples of heir’s property would be a family home or summer house. The co-ownership of this type of property can pose several problems if one of the heirs wishes to sell his interest in the property.

Tenancy in Common

When property is co-owned by several people as tenants in common, each has a right to use the entire property regardless of her ownership share in the land. So if a tenant in common has a 5 percent ownership in the property, she still gets to use the whole property regardless. Each owner of the property has the rights to use the entirety of the shared property as well. As a result, sharing certain property may be problematic, as one co-owner’s use of the property may limit another co-owner’s ability to take advantage of his property rights.

Selling a Tenancy in Common

Each co-owner has an absolute right to sell his interest in a tenancy in common. When a co-owner conveys his property interest to a buyer, the new co-owner receives all of the privileges of co-ownership including using the entirety of the property. Selling an ownership interest in heir’s property can be especially burdensome given the probable relationship between the co-owners and the asset. Since the co-owners are originally all related to the original owner, the property probably has some emotional significance to the owners. By an owner selling to an outside party, the dynamic of ownership in the property can shift and strain the relationship between the co-owners.

Protect your loved ones. Start My Estate Plan

Partitioning the Property

Any tenant in common may demand that the property be partitioned. This means that each owner receives a portion of the property’s value based on his ownership percentage in the original parcel for his exclusive use. Property may be portioned either by giving each owner a portion of the land or, if such a division is impractical, the property may be sold and each owner receive a portion of the profits. For the other owners who do not want a partition and want to keep the land intact for their use, the threat of partition can be highly disruptive.

Avoiding Problems

If you receive heirs’ property as a co-owner, it is a good idea to arrive at a formal agreement regarding the property with the other owners as soon as possible. This agreement should address numerous contingencies such as if one person wants to sell her share or wants to partition the property. Possible solutions to these issues include a promise to buy out an exiting owner to ensure the property stays within the family, and a means to partition the property so that the rest of the property remains under the control of the original owners.

Protect your loved ones. Start My Estate Plan
Do You Have to Partition Undivided Property in a Will?

References

Related articles

In Illinois, What Happens to a Tenancy in Common When There Is a Divorce?

When two people marry, the couple will share their property. Sometimes, couples may want to formalize the situation by establishing a specific type of legal ownership. In Illinois, spouses may co-own real estate in three ways: as tenants in common, tenants by the entirety, or as joint owners with a right of survivorship. If the couple is getting a divorce in Illinois, state law will define what happens to property that is in a state of legal co-ownership.

Houses Split Between Siblings in a Will

One of the most common directives in a will reads “my estate shall be divided equally among my children.” While parents have good intentions, their desire for sibling parity often backfires. How do you split a house between two, three or more children? Unfortunately, a parent’s death shifts the family dynamic and sometimes brings out the worst in siblings. Such a situation leaves siblings with four general options.

Meaning of the Legal Term "Rights of Survivorship"

The term, “Rights of survivorship,” refers to a form of property ownership where two or more people -- often a husband and wife -- acquire property together with provisions in their deed that upon the death of one of them, the survivor automatically acquires the deceased co-owner's share. When property passes by survivorship, there is no need to probate a will to transfer ownership.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

Does Survivorship Override the Will?

Property that is subject to right of survivorship is generally excluded from a decedent’s estate and is therefore not ...

Tenants in Common in a Will

When title to property -- usually real estate -- is held by tenants in common, each of those tenants owns a portion of ...

How to Get Out of Inherited Property Held As Tenants-in-Common

Tenants in common is a type of ownership interest where two or more persons own a piece of property together. Unless a ...

Does a Quitclaim Deed Pass to the Heirs?

When a person dies, a significant portion of his property passes through the probate process to be divided and ...

Browse by category
Ready to Begin? GET STARTED