Do All Heirs Have to Agree to Sell the Property? | What Happens to Real Estate When Someone Dies? | Can a Beneficiary Stop the Sale of a Property? | Can You Buy Out Co-Heirs? | What Happens If an Heir Refuses to Sell? | Can an Executor Purchase the Property?
When a loved one dies, dividing up their assets can be emotional and complicated. Family members might want to hold on to property because of the memories associated with it. Some might want to sell the property to better divide up the assets.
What if the beneficiaries can’t agree on whether or not to sell the house? Or what if the executor has legitimate reasons for putting the house on the market? Do all heirs have to agree to sell the property?
Ultimately, it depends on whether the property is in probate or if the executor of the will has transferred the ownership to the beneficiaries. Read on to learn more about what laws apply in your particular situation.
Keep in mind that a quality real estate agent can help you with the complicated process of selling inherited property – especially when other beneficiaries are involved – but you’ll want to find an agent that has experience selling inherited property.
Do All Heirs Have to Agree to Sell a Property?
No, all heirs don’t have to agree to sell a property. Whether or not they legally have to agree depends on the ownership of the house and if the property is in probate.
If the House Is in Probate
Probate is a legal process that transfers ownership of property through court. In some cases, the court will facilitate the transfer.
Most wills go through probate, even if the homeowner named a beneficiary. If the deceased person didn’t name an heir, the probate court determines who will inherit the property according to state law.
The court appoints an executor to administer the estate. The executor either sells the house or transfers ownership to the right person. Their decision depends on how much debt the deceased person had. If there’s more debt than assets, the property may need to be sold to cover the debt, even if the heirs disagree.
If you’re a beneficiary, you’ll get a notice about the sale, but federal law doesn’t require all the heirs to agree.
Ultimately, the executor can sell the home even if you object to the sale. But it’s best practice for the executor to discuss the decision with the beneficiaries first. Getting approval from the heirs ahead of time can help executors avoid complicated (and costly) legal battles about property ownership.
Property Without Probate
Residential property without probate can pass to beneficiaries without court involvement. Once the property transfer is complete, the beneficiaries become the legal owners of the property and can decide what to do with it.
If you are the only person named as the property’s beneficiary, you have control over whether you sell it.
But if you’re one of multiple co-owners, you’ll need your co-heirs’ input about selling the house. Still, if one person wants to sell, they can force the sale. The law doesn’t require all heirs to agree, although the process is complex and usually requires the help of an attorney.
» Read More: How Long Does an Executor Have to Sell a House?
What Happens to Real Estate When Someone Dies?
When someone dies, their house can’t stay in their name. Ownership must transfer to someone else, but who that person is and how it’s done aren’t easy questions to answer.
If there is a will, the house will pass to the beneficiary or beneficiaries named in the document.
If there is no will, the court distributes the property according to the state’s intestate succession laws.
If the property had a beneficiary deed or was in a trust, it can transfer to the heir named in the document.
Inheriting a home can be great, but if you inherit with co-heirs, it can be hard to get everyone to agree on what to do with the property.
» Learn: Selling Inherited Property: How to Get the Most Out of Your Sale
Can a Beneficiary Stop the Sale of a Property?
No, as a beneficiary, you can’t stop the sale of a property, though you can object to it.
In probate, the court appoints an executor to administer the estate. If the will states that the property has to be sold, the executor has to follow what it says.
Also, if the deceased person’s debt is more than their assets, the executor may have no choice but to sell the property to resolve the debt.
If ownership changes hands without probate, a beneficiary can ask that the property not be sold. But if just one co-heir wants to sell, that person can force the sale through a legal process called a partition action, no matter what the other beneficiaries want.
The process is complicated and pricey, typically costing up to $25,000 or more in legal fees and related expenses.
Can You Buy Out Co-Heirs?
Yes, you can buy out co-heirs.
You can’t force a co-heir to sell you their share. But if they’re willing, you can buy out their share of the property. Here’s how that might work:
Suppose your mom passes away and leaves the house to you and your two siblings, Mary and Lisa. Lisa wants to sell the house, but you and Mary don’t. You can offer to buy out Lisa’s share. If you don’t have the funds on hand, you can refinance the inherited property and take out cash to cover the cost of her buyout.
But ultimately, if she wants to sell the property anyway, she can likely move forward with it without the rest of the heirs agreeing.
Luckily, there are expert real estate agents out there who also have experience navigating complicated sales, even in tense situations between family members. Whether you end up agreeing with Lisa and decide to sell the house, or you and Mary decide to buy her out, you don’t have to navigate all the legal jargon and negotiation yourself.
What Happens If an Heir Refuses to Sell?
If an heir refuses to sell the inherited property and the property in probate, they might have to go along with what the executor decides, whether that’s to sell the house to cover debts the deceased person left behind or to transfer the ownership to an heir.
If ownership is officially transferred and the heirs hold the property as co-owners, it’s in everyone’s best interest for all heirs to agree to the sale.
If an heir who is also a co-owner refuses to sell, the other co-owners can file a partition action with the court — remember, it’s a complicated and expensive process.
Can an Executor Purchase the Property?
Technically, yes, an executor can purchase the property they are executor over.
However, the executor has a fiduciary duty because of their legal role, so they must act in good faith and decide in the estate’s best interest.
If an executor tries to sell the property for less than fair market value, especially if they’re selling it to themselves or a friend or family member, they’re not acting in the best interest of the estate.
In this case, the beneficiary can ask the court to intervene. It might not stop the sale, but it can stop the executor from taking advantage of their position.
Can a beneficiary stop the sale of a property?
No, a beneficiary can’t stop the sale of a property, but they can object to it. Learn more about how to manage inherited property when there are multiple beneficiaries.
Can an executor sell property to himself?
Yes, executors can sell property to themselves. However, they have a legal fiduciary duty to have the beneficiaries’ best interests at heart and not to sell the property for less than its worth. Learn more about how to manage inherited property when there are multiple beneficiaries.
Can a trustee sell the property without all beneficiaries’ approval?
Yes, a trustee can sell the property without all beneficiaries agreeing. This typically happens if the deceased person has more debts than assets, so the trustee will sell the property without all the beneficiaries agreeing in order to settle those debts. Learn more about how to manage inherited property when there are multiple beneficiaries.