Leaving the family home equally to your children can feel like the fairest possible choice. If you have three children, each receives one-third. Everyone is treated the same.
Simple, right?
Not necessarily.
Imagine that your Brooklyn home is worth $900,000. You leave it equally to your three children. One child wants to sell immediately and receive their share. Another has always dreamed of keeping the house in the family. The third has been living there for years and cannot afford to buy either sibling out.
You intended to treat your children equally. Instead, you may have handed them a significant financial and emotional problem.
What Happens When Siblings Inherit a House Together?
A home is fundamentally different from a bank account. You can divide $900,000 three ways. You cannot neatly divide a kitchen, backyard, or primary bedroom into thirds.
When multiple children inherit real estate together, they must figure out what happens next. That may mean deciding whether to sell the property, whether one sibling will buy out the others, who can live there, and how to handle ongoing expenses.
Even when siblings generally get along, disagreements can arise when significant money is involved.
Who pays the property taxes? What happens when the roof needs replacing? Should the child living in the home contribute rent? What if one sibling needs their inheritance immediately while another wants to hold onto the property?
Your children may not answer these questions the same way.
Can One Sibling Force the Sale of an Inherited Home?
Potentially, yes.
Depending on how the property is owned and the circumstances, a co-owner may be able to pursue a partition action seeking a division or sale of jointly owned property.
That possibility is important because an inheritance dispute can quickly become a legal dispute.
What began as three siblings trying to decide what to do with their childhood home can become a disagreement involving attorneys, court costs, delays, and damaged family relationships.
Thoughtful New York estate planning should therefore consider more than who receives the house. It should consider what you want your children to be able to do with it afterward.
What If One Child Wants to Keep the House?
If you already know one child is particularly attached to the home, planning can provide alternatives.
For example, your estate plan might give that child an opportunity or right to purchase the other children’s interests. You might establish a method for determining the property’s value or use other estate assets to create a more balanced inheritance.
Suppose you have a $900,000 home and $900,000 in investments. There may be ways to structure the estate so one child receives the home while the others receive a larger portion of the financial assets.
Equal does not always have to mean identical.
Fairness can sometimes mean designing the inheritance around the actual assets, needs, and family circumstances rather than dividing every individual asset into equal pieces.
What If One Child Already Lives in the Home?
This is particularly important for families in Brooklyn, Queens, Nassau County, and throughout New York.
Perhaps your daughter moved home to help care for you. Maybe your son has lived in the house for years. You may hope your other children will simply allow the arrangement to continue after your death.
They might.
But an assumption is not an estate plan.
Your other children may need their inheritance. They may not want to pay expenses for a home they cannot use. The child living there may not have enough money to buy out the others.
If you want a child to have the right to remain in your home for a specific period or potentially for life, that intention should be addressed deliberately.
Could a Trust Help?
For some families, a trust can provide more direction than simply leaving a home outright to several beneficiaries.
Depending on the family’s goals, a trust may establish who can use the property, how expenses are handled, what happens if someone wants out, and when to sell the property.
That can be especially useful when the property has significant sentimental value or when you hope it will remain in the family.
A trust is not automatically the best solution. In some families, a buyout provision or different distribution of assets may make more sense. In others, selling the home and dividing the proceeds may be the cleanest option.
The important part is deciding before your children have to decide for you.
Call our office at 718-875-2191 to see how we can help you today. Be sure to mention this article so we can focus on your specific concerns and provide personalized advice.
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