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Can you Restrict the Sale of Inherited Property by the Heirs

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  • 12-26-2017, 09:12 AM
    lespaul75
    Can you Restrict the Sale of Inherited Property by the Heirs
    My question involves estate proceedings in the state of: CA

    My mother executed that gives each of her kids an equal ownership in the only asset we have - the family house (which is fully paid for).

    My question is: is it possible to have my mom add a stipulation that says if we do decide to sell the house, that it cannot happen no less than 1 yr after my mothers death?

    The reason this is important to me is because I run my business from my parents house and have quite a bit of tools, supplies, etc there. And although I can move to another location, I cannot do it at the drop of a hat (ie. I will a few months). My only concern is that my siblings would want to sell the house immediately which places a tremendous burden on me and my growing business.

    Obviously I don't expect (and cant) make this change myself -my mother will as she is currently in good health.

    Any feedback would be great, thanks
  • 12-26-2017, 09:49 AM
    adjusterjack
    Re: Setting Provisions in a Family Will on the Sale of Property
    It's a terrible idea to leave a house jointly to siblings. I've read hundreds of posts on these legal sites where that ends up with sibling hostility and expensive litigation. But if it has to be done, it has to be done.

    The problems with putting that kind of limitation in a will:

    1 - It is difficult to enforce without the heirs spending lots of money on litigation.
    2 - Probate laws may require an estate to be closed in less time.
    3 - You'll need to pay rent to your siblings.
    4 - Insurance companies might not want to continue the insurance for too long after death.
    5 - The inevitable hostility between the siblings who don't live in the house and the one that does.

    Your mother would be wise to consult an attorney to see how much of that can be overcome.

    At any rate, even if your siblings decide on day one to sell the house it is likely to take some time to market it and a month for escrow, giving you plenty of time to make other arrangements.

    Or, you can buy out your siblings' interest, assuming you have the money or can qualify for a loan.
  • 12-26-2017, 10:12 AM
    Mr. Knowitall
    Re: Can you Restrict the Sale of Inherited Property by the Heirs
    I don't see it as complicated at all to create an estate plan that would guarantee one heir a year of residency before a property could be sold, nor would such a provision require that the estate remain open or be difficult to enforce. It is also not necessary for such a provision to require rent payments, although if possession is exclusive it would be appropriate for the estate plan to at a minimum require the person with exclusive possession to cover the costs of the home during the period of exclusive possession. Insurance should be no more complicated than in other common arrangements, such as a life estate or tenancy.

    There could be issues of resentment if siblings feel that one sibling is benefiting disproportionately from the estate while their inheritances remain tied up in a home reserved to that sibling's use. If she chooses to go in that direction, that's something for mom to discuss with the other siblings during her lifetime, along with consideration of how inheritances might be made more equal during or at the end of that year.
  • 12-26-2017, 10:17 AM
    Taxing Matters
    Re: Can you Restrict the Sale of Inherited Property by the Heirs
    Quote:

    Quoting lespaul75
    View Post

    My question is: is it possible to have my mom add a stipulation that says if we do decide to sell the house, that it cannot happen no less than 1 yr after my mothers death?

    She could put that in the will but the problem is that the provision is not enforceable. Once the home is distributed to the kids from the estate the will has no control over the property; it is up to the owners to decide what to do with it. The good news is that in order to sell it all the siblings need to agree and if you are one of the owners you can drag things out at least a few months, time enough for you to get out.

    The problem would be if the estate needs to sell the house to pay estate debts. If it needs to do that, the executor may sell the house notwithstanding whatever provision the will says about the timing of the sale, and it is possible that the sale could be concluded fairly quickly. Not much you can do to slow things in that instance.
  • 01-10-2018, 09:49 AM
    lespaul75
    Re: Can you Restrict the Sale of Inherited Property by the Heirs
    Hi everyone thank you so much for all the input. Everyone brought up some great insight. I will discuss this with my mom and have her make the revision - this was her concern as well, so its not going to be an issue.

    Thank you @Taxing Matters for sharing that ALL siblings would need to agree. I was concerned that if 2 of the 3 siblings agreed to sell then that would constitute a majority and I would be out of luck.

    And I may add that the house is FULLY PAID for and there are no liens or the like on the property.

    Thank you again!!
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