When a deceased person leaves a share of real estate to multiple beneficiaries, he could be bequeathing a heap of trouble. The beneficiaries have to make decisions about the property, such as who should live in it and whether they should sell it. Disputes are common, especially if the property holds sentimental value to some of the beneficiaries but not others. While each state handles property disputes differently, in most cases the majority does not rule. The court will decide whether one party has the legal grounds to force a buy out or a sale.
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Where There’s a Will There’s a Way
The deceased person's will determines how the property is transferred and held by the beneficiaries. Many wills direct the estate administrator to sell the property and split the net proceeds among the beneficiaries. In this instance, the beneficiaries will never own the property; they will simply receive a cash sum equivalent to their share. Conflict commonly arises when the will conveys the physical property to more than one beneficiary. Now the beneficiaries must decide whether to keep the property or sell it, and ask the court to rule on any dispute.
Drawing A Line in the Sand
Just because you have inherited a property does not mean that you have to own that property forever. If you want to sell, but your co-owner doesn't, you can file a lawsuit for "partition." Partition physically divides the property between the beneficiaries. This works well for some types of property, such as farmland acreage. However, most residential homes cannot be partitioned. In this scenario the court will force a sale of the home and divide the net sale proceeds between the beneficiaries according to their percentage ownership of the home. The court can order partition on the application of a single beneficiary, even if the majority would prefer to keep the home.
The Shotgun Approach
If you find yourself on the receiving end of a partition lawsuit but wish to keep the property, one option is to buy your co-owners out. Known legally as "partition by appraisal" or the more colloquial "shotgun," this arrangement demands that you have the cash or a mortgage to buy out your partners. You should appoint an appraiser to determine a fair price for the home and an attorney to file the legal paperwork. If you cannot agree on a buy out, the court may proceed with a third-party sale.
Negotiation and Compromise
Partition is a tough remedy that forces an unwilling party to give up a property they hold dear. It is also costly and time consuming -- partition actions may take one year or more to resolve. Before you choose this route, consider your options. Perhaps the co-owners who wish to sell could transfer the home to the owner who does not, in return for a monthly repayment, made over a period of years, until he has paid the purchase price. Perhaps you could rent the home. While the majority may not rule at law, reaching an amicable majority decision will preserve the relationship you have with your co-owners in the long run.