What Happens When a Beneficiary Is Living In an Inherited House?

Inheriting real estate with other people can be challenging, particularly when one of the beneficiaries is living in the house. This scenario commonly occurs when siblings jointly inherit their parent’s home, which can lead to increased family tensions during an already emotional time.

It is always preferable for siblings to work out an arrangement that all of the beneficiaries agree with, such as a buyout agreement. However, under California law, if the siblings can’t agree any of the siblings want to sell the house they inherited, they can use a legal proceeding known as a “partition action” to force the sale.  

What Happens When One Sibling Lives In an Inherited Property and Refuses to Sell?

When one sibling lives in an inherited property and refuses to sell when the other siblings want to, there are several options for solving the dispute. For example, if the sibling living in the home has the financial means to do so, they could buy out the other siblings’ shares of the property. 

However, if the beneficiaries cannot agree on how to handle the situation, the siblings who want to sell can force its sale through a partition action. A partition action is a legal proceeding that allows a co-owner of a property to get a court order either (1) to sell the property; or (2) dividing the property into separate parcels for each owner, if possible. But since residential homes can rarely be apportioned like this, the most common outcome in these situations is that the court orders the property to be sold and the proceeds to be divided among all co-owners – importantly after the petitioning party’s fees and costs are paid. 

This means that the siblings that want to sell an inherited property can typically force its sale, even over the objections of the sibling who lives in and wants to keep the home. 

Can I Buy Out My Siblings From an Inherited House?

Yes, if you and your siblings inherit a house together, you can buy them out if all siblings agree. 

Even if your siblings have already filed a partition action, there is still time to reach a settlement agreement. The fact that a partition action has been initiated does not mean that the forced sale of the inherited house is inevitable, as long as you and your siblings can come to an agreement. The most common settlement scenario is where the sibling who wants to keep the house buys out the siblings who want to sell it. 

If this is not a possibility, siblings can pursue alternative arrangements such as renting the property to the sibling living there or allowing the sibling to keep the home in exchange for their share of other estate property. In some situations, it may be acceptable to all the beneficiaries for the sibling who wants to keep the property to purchase their shares through a payment plan.  There are as many solutions as you and your siblings can get creative.   

If you are involved in a dispute with your siblings regarding whether to sell a jointly-inherited property, you should discuss your situation with an experienced partition action attorney sooner rather than later. Regardless of whether you want to keep the house or sell it, the earlier you involve a probate litigation lawyer, the better. Not only can an attorney help you file or defend a partition action in court, but if you speak to a lawyer quickly enough, they can help you negotiate a settlement agreement that allows you to avoid court altogether, as well as the financial and emotional costs associated with litigation. 

Have questions? We’re happy to discuss.
Call (424) 320-9444 or email [email protected]

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About RMO, LLP

RMO LLP provides personal and efficient inheritance dispute services to individual and institutional clients. The firm’s attorneys focus on probate litigation involving contested trust, estate, probate, and conservatorship matters. Serving California and Texas, with offices in Los Angeles, Pasadena, Orange County, San Diego, Fresno, the Bay Area, Dallas, and Houston. For more information, please visit https://rmolawyers.com/.

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About the Author

Scott Rahn, Founding Partner

Scott Rahn resolves contests, disputes and litigation related to trusts, estates and conservatorships, creating a welcome peace of mind for clients. He represents heirs, beneficiaries, trustees and executors. He utilizes his experience to develop and implement strategies that swiftly and efficiently address the financial issues, fiduciary duties and emotional complexities underlying trust contests, estates conflicts and probate litigation.

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