How to Navigate Two or More People Inheriting a Home

Adult Siblings Standing in Front of a Home

It can be daunting to suddenly find yourself responsible for a home when a loved one has passed. It can be even more difficult when there’s more than one inheritor of the property. You may be wondering what your options are for navigating this multi-faceted situation, especially if you are unfamiliar with the other person or don’t see quite eye-to-eye with them.

Before we jump into that, you first need to be absolutely certain you are the inheritor of the property. So…

How is an Inheritor Determined?

The matter of inheritance, especially in the context of real estate, is an intricate one, woven through with threads of legal, familial, and sometimes emotional considerations. When it comes to who inherits a home after the owner’s demise, several factors and entities play decisive roles.

  • The Will: The primary document that dictates the inheritance of a home is the deceased owner’s will. A will is a legal document in which individuals specify how their assets, including real estate, should be distributed upon their death. If a will is in place and is deemed valid by a court of law, the instructions within the will are to be followed.
  • Probate Court: The probate court is a significant player in the inheritance process. It’s the judicial body that oversees the distribution of a deceased individual’s assets, ensuring they are allocated according to the deceased’s will, or, in the absence of a will, according to state law.
  • State Law: In the absence of a valid will, state laws, often termed as “intestacy laws,” kick in to determine who inherits the assets. These laws have a hierarchy of inheritors, usually favoring spouses and children first, followed by other relatives.
  • Trusts: Trusts are another mechanism through which individuals can dictate the inheritance of their assets. A living trust, for example, allows individuals to place assets, including homes, in a trust to be managed by a trustee for the benefit of specified beneficiaries. Trusts can provide a smoother transition of asset ownership compared to the often-lengthy probate process.
  • Joint Ownership: If the home was owned jointly, the surviving owner(s) often inherit the deceased owner’s share of the property through “right of survivorship.” This is common among married couples.
  • Life Estates: In some cases, a life estate might be set up where an individual is given the right to live in the home for the duration of their life, but upon their death, the property passes to other named individuals.
  • Heir Hunters: There are professionals known as heir hunters who seek out the legal heirs of individuals who have died intestate. They play a crucial role in tracing and identifying legal heirs in complex situations.

The inheritance of real estate is a complex matter, often requiring the guidance of legal and real estate professionals to navigate successfully. It’s a meld of legal adherence and, sometimes, familial negotiations, underscored by the need for clear communication and understanding among all parties involved.

Each situation is unique and may necessitate different courses of action or involve different individuals or entities. It’s advisable for property owners to have clear, legally sound plans in place for the inheritance of their assets to ensure their wishes are carried out and to provide clarity for their loved ones.

You’re an Inheritor – What’s Next?

You and the other inheritor(s) will need to come to an agreement about how to proceed with the management of the property. This usually comes down to:

  1. Selling the Property: This is usually the cleanest way to handle the inheritance of the property, because each inheritor receives a share of the proceeds and moves on with their lives.
  2. Buying Out All Other Inheritors: If one inheritor really wants the property, they can pay the inheritors their share of the market value of the home. This requires a bit of work to guarantee the other inheritors are treated fairly.
  3. Co-Owning the Property: If the subject property is a vacation home or investment property, the inheritors may decide to co-own it and share the responsibility of upkeep. This would allow them to retain the ability to use it and/or make money off the lease. To keep everyone happy, there are some important steps to take (listed below).
Siblings Talking to Their Real Estate Agent

Siblings Talking to Their Real Estate Agent

If Both Inheritors Want to Sell, How are the Proceeds Dispersed?

When two or more inheritors come to a mutual agreement to sell an inherited property, the process tends to be less contentious compared to scenarios where the co-owners have conflicting desires. The distribution of the proceeds from the sale is a critical aspect of closing this chapter of inheritance. Here’s how it typically unfolds:

  1. Determining Ownership Shares: The first step is to ascertain the ownership shares of each inheritor as stipulated either in the will, trust, or by state law in the absence of such documents. This step sets the stage for a clear, fair division of the proceeds post-sale.
  2. Property Appraisal and Sale: Before listing the property for sale, it’s prudent to have it appraised to understand its market value. Once the property is sold, the total sale price becomes the primary figure from which distributions will be made.
  3. Settling Outstanding Debts and Expenses: The sale proceeds will first be used to settle any outstanding debts, mortgages, or liens on the property. Additionally, expenses related to the sale such as real estate agent commissions, closing costs, and any necessary repairs or improvements to prepare the property for sale are also paid from the proceeds.
  4. Probate or Trust Administration Fees: If the property sale is part of a probate or trust administration process, there may be associated legal and administrative fees that need to be paid before distribution to the inheritors.
  5. Distribution According to Ownership Shares: Once all outstanding expenses and debts are settled, the remaining proceeds are distributed to the inheritors based on their respective ownership shares. This distribution should reflect the percentages of ownership, as previously determined.
  6. Documentation: It’s crucial to meticulously document the entire process – from the sale transaction, settlement of debts, and the final distribution of proceeds among the inheritors. This transparency helps prevent misunderstandings and disputes, and provides a clear record for legal and tax purposes.
  7. Tax Implications: The sale of inherited property can have tax implications, including capital gains tax. It’s advisable for the inheritors to consult with tax professionals to understand and prepare for any tax liabilities arising from the sale.
  8. Professional Guidance: Engaging the services of real estate professionals, attorneys, and tax advisors can provide invaluable guidance throughout this process, ensuring that all legal, financial, and tax obligations are met, and that the distribution of proceeds is conducted fairly and transparently.

The coalescence of legal, financial, and familial considerations within the realm of inherited property sales necessitates a well-coordinated, professionally guided approach. Ensuring a fair, transparent, and smooth process not only honors the legacy of the deceased but also fosters a sense of closure and equity among the inheritors.

Two Men Arguing in Dining Room

Two Men Arguing in Dining Room

What if Only One Inheritor Wants to Sell?

Navigating the territory of shared inheritance can be akin to threading a needle amidst familial ties and legal obligations. When two or more individuals inherit a property, each with varying intentions regarding its disposition, the situation can swiftly morph into a complex conundrum. The clash of selling versus retaining the inherited home often finds its resolution within legal frameworks, albeit with a dash of negotiation and sometimes mediation.

  1. Understanding Co-ownership: The initial step in untangling this situation is understanding the nature of co-ownership. When two or more individuals inherit a property, they typically become tenants in common or joint tenants, each with an undivided interest in the property.
  2. Communication and Negotiation: Before leaping into legal battles, open communication and negotiation among the co-owners could pave the way toward a mutually agreeable solution. This could involve one party buying out the other’s interest or agreeing on a timeline for selling the property.
  3. Buyout: A common resolution is for the party interested in retaining the property to buy out the other party’s share. This requires a fair market valuation of the property, often necessitating the services of a professional appraiser. The selling party receives compensation for their share, while the buying party gains full ownership of the property.
  4. Mediation: If negotiations hit a stalemate, mediation can be a viable next step. A neutral third-party mediator can help the co-owners explore solutions and potentially reach an amicable agreement.
  5. Partition Action: When co-owners can’t come to an agreement, a partition action is the legal recourse. This is a lawsuit that essentially asks the court to physically divide the property or order its sale, with the proceeds distributed among the co-owners. While physical division is more common with large tracts of land, a sale and subsequent distribution of proceeds is often the outcome for residential properties.
  6. Sale of Property: If the court orders the sale of the property, the proceeds are divided among the co-owners in accordance with their ownership interests. However, it’s worth noting that a forced sale can sometimes result in a lower sale price compared to a voluntary sale.
  7. Legal Costs: A partition action can be a lengthy and costly process, with legal fees possibly devouring a significant portion of the sale proceeds. This reality often incentivizes co-owners to seek an out-of-court resolution.
  8. Professional Assistance: Engaging the services of experienced real estate professionals and attorneys well-versed in estate and property law can be invaluable. They can provide insights into the legal intricacies, market conditions, and negotiation strategies, potentially steering the co-owners toward a satisfactory resolution.

The journey from co-inheritance to the final disposition of a property can be laden with both legal and emotional intricacies. The scenario of divergent intentions among co-owners underscores the essence of preemptive estate planning, lucid communication, and the harnessing of professional expertise in navigating the nuanced landscape of real estate inheritance.

Family Walking to Vacation Home

Family Walking to Vacation Home

What if Both Inheritors Want to Co-Own the Property?

Embarking on the path of co-ownership of an inherited property presents a unique blend of opportunities and challenges for inheritors. When both parties are keen on retaining the property, several facets need to be meticulously navigated to foster a harmonious and legally sound co-ownership structure. Here’s a dive into the nuances and steps that often characterize such a venture:

  1. Drafting a Co-ownership Agreement: A co-ownership agreement is the cornerstone of successful property sharing. This legal document should delineate the rights, responsibilities, and obligations of each co-owner. It can cover aspects like the division of expenses, usage rights, how decisions will be made, and how disputes will be resolved.
  2. Financial Responsibilities: Co-owning a property entails sharing the financial burdens, including mortgage payments (if any), property taxes, insurance, and maintenance costs. A clear agreement on how these expenses will be shared is imperative.
  3. Usage Arrangements: Defining how the property will be used—whether as a residence by one or both co-owners, a rental property, or for some other purpose—is crucial. If the property is to be rented out, agreement on how rental income will be divided is also necessary.
  4. Maintenance and Improvements: A plan for ongoing maintenance, as well as any improvements or alterations to the property, should be outlined. This includes how decisions will be made regarding contractors, costs, and the timing of such projects.
  5. Decision-making Process: Establishing a decision-making protocol can preempt potential disputes. This could include stipulations on what types of decisions require unanimous agreement, and how disagreements will be resolved.
  6. Exit Strategy: It’s wise to have a mutually agreed upon exit strategy should one or both co-owners wish to sell their stake in the future. This could include a buyout clause, rights of first refusal, or provisions for selling the property and dividing the proceeds.
  7. Legal and Financial Counseling: Seeking professional advice from attorneys and financial advisors well-versed in real estate and inheritance law can provide invaluable insights and help draft a comprehensive co-ownership agreement.
  8. Insurance: Ensuring the property is adequate, including liability insurance, is crucial to protect the assets and interests of both co-owners.
  9. Record-Keeping: Meticulous record-keeping of all expenses, income, and decisions related to the property can help prevent misunderstandings and provide a clear history of the co-ownership arrangement.
  10. Communication: Maintaining open, honest, and frequent communication is the linchpin of successful co-ownership. Regular meetings or check-ins can help address issues promptly and keep the co-ownership arrangement running smoothly.
  11. Respecting Personal Relationships: Navigating the intersection of personal relationships and shared property ownership requires a delicate balance. Respecting the personal dynamics while adhering to the agreed-upon legal and financial arrangements can contribute to a positive co-ownership experience.

Embarking on a co-ownership journey of inherited property necessitates a blend of legal foresight, financial planning, and interpersonal understanding. With the right preparations and ongoing communication, co-owners can forge a mutually beneficial arrangement that honors their shared inheritance while catering to their individual and collective aspirations.


Whichever steps you and the other inheritor(s) choose to take, make sure you speak with a real estate professional to get an idea of the property’s market value. This can help you understand the amount of proceeds you may obtain if the home is sold, how the value of the property could be divided, and how the property could potentially gain value. A real estate professional can also get you an estimate of potential rental income, if that is how the property will be used.

If the property is located in Southeastern North Carolina (the greater Wilmington area from Onslow County down to Brunswick County), we are happy to provide our expertise. Give us a call at (910) 233-2840 and give us some insight into your situation.

About the Author
Meghan Henderson
Meghan is the Marketing Specialist for The Cameron Team and a published author of two young adult books. She also creates digital and printable planners and trackers, as well as coloring pages for Larkspur & Tea.