Stories about adult siblings squabbling over inheritances aren’t only common everyday occurances — they also make for juicy news headlines.
Witness the ongoing brawl over the media empire of nonagenarian News Corp mogul Rupert Murdoch, which involves his sons, Lachlan and James, duking it out.
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But sometimes, tales of internecine conflict can hit especially close to home — literally.
In an anonymous Reddit thread, someone recounted how his mom, who passed away in 2018, left her home to him and his two siblings.
The Redditor claims he bought his siblings out only to witness them squander the money on big-ticket luxury items.
Last year, he and his wife sold the home, but by then the value had nearly tripled. Now, his siblings want their cut of the earnings. “Both of my siblings think that I owe it to them to split the profit I made,” he wrote. “This has become really toxic and most of my family is on their side.”
The Redditor insists he did everything by the book, so why are his relatives throwing the book at him — and who is in the right? Luckily, there are some tips on how to navigate property inheritances among siblings.
The key to successful estate planning
Estate planning is more than a legal document — it also involves special consideration of family dynamics.
It gives you the opportunity to clearly articulate your wishes and outline any and all financial, medical, and personal decisions. This can help your loved ones avoid any conflict and confusion down the road.
But according to a 2023 study from LegalShield, nearly 60% of Americans do not have a will — this, despite the fact that 90% of those surveyed acknowledged the importance of creating a will.
This brings up a key issue you’ll find referenced time and again by estate planners and attorneys: communication.
Ideally, close family members come together to have an open and honest discussion about a loved one’s estate plan. This offers everyone an opportunity to ask questions, voice concerns, or seek clarifications.
These discussions can be done one-on-one or as a small group. If there are still disagreements, a financial professional can intervene to help smooth things over.
What to consider when inheriting property with siblings
Inheriting property with a sibling isn’t necessarily a straight-forward process, even when stipulations are outlined in a will. For example, what if one sibling refuses to sell?
It’s not uncommon for there to be disagreements among siblings on how to divide up property.
According to research from Ameriprise, while only 15% of siblings argue over money conflicts, of that cohort, 68% of the money quarrels were related to their parents — which includes wills and inheritances.
So, what are some steps you can take to help you navigate this transition with siblings?
Read more: Rich, young Americans are ditching the stormy stock market — here are the alternative assets they’re banking on instead
Get an appraisal on the property
Although it’s not always necessary, getting an appraisal can help you assess (and prove) the value of the property to the IRS at the time of inheritance.
The appraisal will also factor in recent sales of similar properties, market trends, and the details of the home — including size, condition, and amenities.
This can be beneficial in helping you and your siblings decide what you want to do with the property. For example, you can sell it and divide the money evenly or turn it into an income property and split the rental income.
Another option is to keep it as a family vacation home. In some cases, one of the siblings may want to live there for a period of time.
Get post-inheritance arrangements in writing
Even if you reach an amicable arrangement to divide real estate assets, the Reddit example above shows how discord can render a verbal agreement useless.
Experts contend that, after a property sale, you’ll want a legally binding document that stipulates the transaction is final and other family members can not pursue future gains after the fact.
If everyone is on the fence about what to do with the property, consider some of the following questions:
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Does the home still have a mortgage?
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What repairs/maintenance need to be done before selling?
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What are additional annual expenses on the home — and who is paying for them?
QuickenLoans encourages family members to “keep organized notes of all of the terms and agreements of the sale, which can prevent misunderstandings between parties.”
Hire a qualified expert
Estate planners, probate attorneys, and independent executors can assist siblings in nailing down how the property will be divided and sold, whether that’s to each other or an outside party.
In cases of extreme sibling disagreements, hiring a bank or similar institution as an estate executor “will often help to avoid fierce competition and contention among family members,” according to attorney H. Van Smith.
Having an attorney present can help stop conflicts from escalating, as well as help you reach a solution that is agreeable to everyone. In the end, having a third party present just might save the day.
In the end, you can sell a home and make a tidy profit, but that’s not quite the same as reaching an amicable arrangement with siblings.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source Agencies
