If you inherit property in Texas, you may wonder what you can do with it. Depending on your situation, you may face restrictions. For example, if other heirs have an interest, they may need to agree to a sale. Let’s look at whether all heirs have to agree to sell property in Texas and also find out what other options you may have in Texas.
Inheriting Property Intestate in Texas
If you’ve inherited property that did not come to you through a will, you’ve inherited it according to intestacy laws in Texas. (1) Often large families do not realize who owns a property until someone is ready to sell.
For example, let’s say Jimmy marries Lynette and moves into her home on 30 acres. They have 3 children together and also raise Lynette’s first 2 sons from a previous marriage. So they raise 6 children altogether.
Five years later, Lynette suddenly passes away. Because Lynette owned the home as separate property rather than community property, the children now own the home entirely due to intestacy laws.
However, Jimmy receives a life estate, meaning he can live there and continue paying the mortgage and utilities. However, he does not own the property himself. He cannot do whatever he pleases with it.
Let’s say Jimmy dies intestate 20 years later. After probate, the home and property go to all 6 children. If none of the 6 heirs pay the mortgage or utilities, the home and property can fall into foreclosure with the bank.
If no one wants to pay the mortgage or live there, the six children might find an agreement to sell the home together. However, complex issues come into play if one wants to stay there and the others want to sell. (1)
A real estate attorney can make all the difference in this situation. A legal professional can help you find the best case scenario for all heirs.
Selling a Jointly Owned Property
Multiple heirs owning property together happens around the US more than you would think. A common situation is when several heirs inherit a jointly owned property, and one heir has strong ideas about selling it. However, the other owners disagree and will not sign anything to sell.
For example, let’s say Lynette’s oldest son wants to sell the property and divvy up the proceeds between the 6 children. However, when he talks with a realtor about listing the property, he finds that all 6 children must sign the seller’s contract for the contract to be valid.
In this case, the son may want to pay off the other heirs and buy the title himself. He can then sell the property and keep all of the proceeds. If he doesn’t have the money to do this, talking with a real estate attorney can help him see his options more clearly.
Another likely scenario is that 4 children want to sell, and the other 2 want to keep the property for sentimental value. Running into a situation like this can feel impossible. However, with help from a real estate attorney, you can find an agreement.
Probate Court Can Stop a Sale
When a person dies in Texas, their estate goes through probate court to settle bills and taxes before distributing assets to heirs. If necessary, the probate court looks at whether the estate must sell the home to pay the bills and creditors of the estate. Until the probate court releases the house to the heirs, no one owns it.
Often, heirs are in the dark about bills or creditors who make claims on an estate. The family may only find out that the state claimed Medicaid reimbursement 3 months after the death. If the estate cannot pay the claim outright, the probate court may order the home sold to pay off the debts. Any remaining monies would then go to the heirs.
Are There Any Benefits to Keeping Inherited Property?
Holding onto property as an investment can sometimes work for multiple owners, if
- The location is good, and the value is likely to increase over time
- Heirs can agree on how to manage the property or all want to live there together
- All heirs have the same general goal of making money from rentals or other business ventures involving the property.
However, working these agreements out is best done with an experienced real estate attorney who can watch out for your best interests.
Another beneficial situation could be if one person chooses to live in and keep the property up while the others agree. Perhaps all heirs agree that one heir lives in the home and doesn’t pay rent in exchange for keeping the house in good repair with a clause that all heirs contribute to significant repairs above $1000.
Problems with this arrangement can come if the individual living in the home:
- Wants extensive improvements that the other heirs do not want to pay for
- Puts money into new appliances or other expensive items, expecting to recoup those expenses down the road if they all decide to sell. (The other heirs may disagree that this individual should receive more money.)
- Either side does not keep their end of the bargain: If the individual living there destroys the home or lets it go, OR the other heirs refuse to help with necessary upkeep such as a new roof.
When one heir lives in the home while several other heirs also own the house and property, matters can become complex and cause family rifts. Bringing in an estate attorney to help settle what is fair according to Texas law can help all heirs get their fair share.
Talk to A Real Estate Attorney
Inheriting property can be complicated, but with a bit of planning, you can find a way to extract the worth from inherited property. If you have questions about selling or managing inherited property, speak with a qualified real estate attorney in Texas.
A real estate attorney can help with more than just working out an agreement between you and other heirs. They can also advise you on:
- Your options for selling property that is in poor repair or located in an undesirable area
- Creating the best real estate contracts for your best interests
- Drawing up agreements between heirs to own property together
- Placing property into a trust
- Negotiating mortgage issues with a bank
- Eliminating tax or mechanic liens on property
- Initiating short sales, forbearance deals, cash for keys, or other programs to help
Don’t try to go through the process of selling or managing inherited property without legal assistance.
We Can Help
At Jarrett Law, our experienced real estate attorneys can help you navigate the often-tricky process of selling or managing your inherited property. We listen to understand your unique situation and help you develop a plan that works for everyone involved. Our real estate attorneys at Jarrett Law firm have experience with all real estate negotiations, contracts, and court cases.
We can help you understand your options for moving forward. Contact us today to set up a consultation and find out how we can help!