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If you’ve recently inherited a house with your sibling(s), you’re probably wondering what to do next. There are a few things you want to check first to make sure you’re going the right way.
One of the first things that you want to look into is the executor of the estate left to you. It doesn’t necessarily have to be one of the siblings, but often it is. The executor has a variety of tasks, such as-
Handling the probate application and dividing the estate accordingly,
Collecting the assets
Settle any liabilities
Pay the required tax
Accurately distribute the estate between the beneficiaries.
If you’ve been named the executor but don’t want this duty, you’re about to fill out a renunciation form and pass the responsibility. Acting as the executor can cause a lot of stress and it may not be something that you want to deal with considering the circumstances.
The next thing that you’ll want to think about is the two types of joint ownership. There are two options, and it’s important to make sure that you’re going with the right one. There’s a chance that this decision was made for you in the will, depending on how it was written.
1. Joint Tenants
This essentially means that everyone has equal rights to the property; it’s split equally between the amounts of siblings. If one sibling is to pass away, the property will stay in the possession of the other siblings. The last sibling with rights will then be able to pass the property on to whomever they choose.
2. Tenants in Common
Each person has a share of the property, but the percentage doesn’t have to be equal. The siblings involved can also pass on their percentage to their children or someone else if they want to, giving more freedom in where the property ends up.
If one of your siblings is living in the property that you’re inheriting, it may be worth considering buying them out if you’re keen to sell. This is usually an easier way to deal with the property, as you only have to buy their half of the house and not the full value. You’re then able to pay your sibling(s) for their share and change the deed to sole ownership under your name.
If you’re not happy to sell the property but the other siblings that have inherited the house with you are and are trying to force the sale, it’s important to know that they cannot. For more information on how siblings cannot force a sale here.
There’s a chance that the property you’ve inherited still has a mortgage, and if this is the case then it does add more to consider when deciding whether to keep or sell the property. Often, if the deceased had life insurance this can repay any outstanding payments on the mortgage. If they did not have life insurance, or it does not cover the outstanding mortgage, this is factored into calculating the Inheritance Tax and can reduce your tax liabilities. However, it also means that you and your sibling(s) are sharing the ownership of part of the property, and can cause issues as you are all responsible for paying the mortgage. This can often be a big factor when siblings are deciding whether to buy or sell, as if they already own their own house they don't want to pay for two mortgages a month, and so will often encourage them to lean towards selling for ease and comfort.
There are several options when it comes to inheriting a property with your sibling(s), the main focus is to communicate with them and ensure that everyone is on the same page to ensure it’s a smooth a process as possible.