Estate Planning: Dividing Assets Between Adult Siblings

Q: My parents died and had a will in place. I would like to know what option we have to sell the assets of my parents’ estate and dividing the money among the siblings.

They died over two years ago, but one of my siblings is living in the home rent free while the other sibling has nothing. What can we do to sell the house or collect rent from the sibling living in the home? The person living in the home is the co-executor of the will.

A: If you have asked the sibling to pay his or her share of the costs of living in the home and he or she refuses, you might only be left with fighting it out in court or deducting the costs of having lived in the home from whatever money you get from the sale of the home.

When your parents were alive, they could decide whether a sibling could or should live in a home rent free. But once they passed away, their estate owns the home and the estate decides how to handle the management of that property.

While it may be difficult to charge the sibling rent, there may be a legal duty to pay for those expenses. You will need to talk to an estate attorney to figure out what your options might be. If you find out that you can sue your sibling, you can do that, but will have to decide whether the costs of suing your sibling outweigh the money the estate isn’t receiving from having that person live in the home.

If you can’t or decide not to sue, then you might find out that you can force the sibling to get less from the sale of the home due to the costs of having him or her live in the home all this time.

The key to your issue is whether your sibling is willing to sell the home. If your sibling is willing to sell the home and you are able to sell it, then the money from the sale can go to the estate and you can decide how to divide it. You’ll need to be careful and may need legal assistance. Since the will specifies that the proceeds from the sale of the home are to be split evenly, your sibling might try to do just that.

You may need to have a court order in place stating that the proceeds will be split evenly after the expenses of the estate have been paid, including all of the expenses of owning the home.

Those expenses would include the real estate brokerage commission and all the normal costs of selling a home, but also the costs of owning the home after your parents died such as real estate taxes, mortgage payments and other expenses. You may also have to allocate an imputed benefit obtained by the sibling having lived in the property and never having paid rent for the stay in the home.

An estate attorney would be helpful to you and you should talk to one sooner rather than later.

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One Response to Estate Planning: Dividing Assets Between Adult Siblings

  1. Ann-marie says:

    NY State: my brother is the executor of my fathers will and there are 8 siblings total. I would like to buy my fathers already paid off home via a modified rent with option to buy payment plan over the next 5 years. Can my brother (alonge) make the decision to sell it this way OR does he need written permission from all of the siblings.

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