Beneficiary Living in Inherited House? Here Are Your Options

Inheriting a home with multiple heirs can be complicated—especially when one of the beneficiaries happens to live in the property. Understanding your options and knowing what to expect can help all parties make a more informed decision on how to move forward.

What If a Beneficiary is Living in the Inherited Home?

In most cases, when siblings or other beneficiaries inherit a property together, the easiest course of action is to sell the home and split the proceeds. 

But what happens if one of those beneficiaries is living in the home and isn’t motivated to sell? There are a few options, which we’ll explore in greater detail below. 

Can We Evict a Beneficiary from an Inherited Home?

Eviction isn’t typically an option when it comes to inherited property unless the person living there is not a named beneficiary. If they are an heir to the property, then they have a right to a portion of the home and can continue living there. 

This doesn’t mean there aren’t other legal options for forcing a resistant beneficiary out. It just means you’ll probably need to take a different route than traditional eviction. A probate or real estate attorney can help you determine exactly what your rights and options are.

Can We Force the Sale of the Home While a Beneficiary is Living There?

If the home is still in probate, then it may be possible for the executor or administrator to force the sale. Of course, this entire process would be overseen by the court, which means there must be reasonable grounds for doing so. 

When making a decision, the court will consider certain factors, such as the wishes of the deceased, the current use of the property, and the needs of any occupants. 

Steps to Take When a Sibling is Living in Inherited Property

Communicate

The goal should be to reach as amicable an outcome as possible, so the first step we recommend is to sit down with all the heirs and have an open, honest discussion. Try to understand the reasons why the sibling or beneficiary is refusing to leave the property, and then see if you can negotiate to come up with a solution. 

Offer to Sell Your Share(s)

If you are unable to reach an agreement for your sibling to move out of the property, then another option would be for the other heirs to sell their shares. This would transfer full ownership to the person living in the home while ensuring that all other beneficiaries receive their share of the property’s value.

Allow Them to Stay

You may find the easiest and least hostile solution is to simply allow your sibling to remain in the home but draw up a formal agreement outlining everyone’s rights and responsibilities. For instance, you might agree to be compensated in the form of monthly rent payments, and the heir living in the home may agree to take on all upkeep and expenses associated with the property.

Consider Mediation

The next step might be to enlist the help of a mediator who is experienced in settling these types of disputes. They can bring everyone to the table, give each person a chance to argue their case, and help all the parties work toward a mutual agreement. This route is typically more amicable and also more affordable than involving the court.

Seek Legal Action

If a fair compromise cannot be reached, even with the guidance of a mediator, there may be no other choice but to file a lawsuit to seek a partition action. This will allow the court to weigh in and determine whether the property should be sold. And because this is a legal process, the outcome will be set in stone. 

What if You Are the Beneficiary Living in the Home?

On the flip side, what if you happen to be the sibling residing in the home and refusing to leave or sell? Your options would be the inverse of those listed above. 

You could agree to buy out your other siblings and take full ownership of the property. If you can’t afford to do this in one lump-sum transaction, you could agree to a payment plan or take out a loan.

In any case, if you decide to stay, even if you are currently in negotiations with the other heirs, here are a few important things you’ll need to consider:

• Mortgage – If there’s an existing mortgage on the home, payments must be kept up to date. While it’s not uncommon for the estate to pay this, once the property is no longer in probate, someone will need to take over those payments. Any beneficiary living in the house will typically take on that responsibility.
• Repairs – In addition to the mortgage, the property itself will need to be brought up to livable condition. This is often quite an undertaking, as inherited homes are frequently left in disrepair. If you plan on living there, keep in mind that you may need to dish out a significant amount of funds to fix the place. 
• Bills – Maintaining a home can be expensive. There are monthly utilities to consider, as well as property taxes, insurance, and more. Again, if you insist on living in the home, chances are your siblings will expect you to keep up with these expenses. 

A Quick Cash Sale May Be the Answer

Whether it’s you, one of your siblings, or another beneficiary living in the home, the situation can become highly contentious, not to mention costly. And if you involve the courts, the process could drag on for months or even years. Meanwhile, your relationship with the other heirs will likely continue to deteriorate.

It may be worth discussing a quick sale to a cash buyer. With the right investor, you may even be able to sell the home in its current condition without having to invest in repairs or renovations. Most importantly, you’ll each walk away with money in your pocket while hopefully keeping your relationships intact.