Dividing an Inheritance
Many people inherit a parent’s estate equally with their siblings. This often creates problems, especially when the estate has non-liquid assets, such as real estate.
Dividing an estate equally between children is a popular move for many parents. For example, there might be three siblings, and the will leaves each a third. Or there are two siblings and they divide it 50/50. If the estate is made up of cash, then beneficiaries can easily divide everything.
But what happens when there are assets that are hard to divide? For example, you might have inherited your parents’ home. Do you have to sell it? Should you sell it? For help with probate, contact an attorney in The Villages today.
Value All Assets
This is a key step in probate. Chances are, your parent left many different assets to you. You need to know how much they are worth. In formal administration, the personal representative must undertake this step. This is true even if the estate holds no real estate.
Sometimes, valuing an asset requires the help of an appraiser. In other situations, you can look to see how much personal property is selling for on the open market by checking eBay or flea markets.
Try to Divide Assets without Selling Anything
This is the ideal situation. For example, an estate might be made up of real estate, retirement accounts, cash, and investments. In this situation, the home might be worth $250,000 and the rest is worth $350,000. One beneficiary could take the home and $50,000, while the other takes the remaining $300,000.
However, this type of division is not always possible. In many cases, the home might be $250,000 and other assets equal only $100,000 or so. You can’t make an equal division without dividing the equity in the home. And since you can’t physically divide a home, you need to consider other options.
Should You Sell or Buy Out a Sibling?
Instead of selling, one option is to buy out your sibling. You would probably have to get a loan and then pay the value of his or her equity share in the property. After doing this, you take the home in your own name.
Unfortunately, getting a loan is tricky given the current economic climate. You might also lack the cash to use. What other options do you have?
At this point, you need to consider selling the asset, which is rife with problems. The recent economic contraction has caused real estate activity to fall in many cities, so this might not be the best time to sell. You should do everything realistic to increase the value of the asset so that there is more to divide, and an attorney can walk you through the process.
Getting Help with Probate
Probating an estate sounds easy in theory, but many problems arise that require creative solutions. At Millhorn Elder Law Planning Group, our probate attorneys in the Villages can work with you to ensure that your portion of an estate is protected. Never sign away your right to assets without having an attorney review the agreement.
To schedule a free consultation, please call us today, 800-743-9732.