I ransomed my brothers and sisters from our mother’s house. The house then tripled in value and they want a share of the profits.

Stories of adult siblings fighting over inheritances are not only common everyday occurrences, they also make juicy headlines.

Witness the ongoing tussle over the media empire of nonagenarian News Corp mogul Rupert Murdoch, which involves his sons, Lachlan and James, who are getting away with it.

Don’t miss

• Auto insurance premiums in the United States are skyrocketing – and only getting worse. But 5 minutes could get you paying as little as $29/month

• Commercial real estate beat the stock market for 25 years, but only the very wealthy could buy there. Here’s how even ordinary investors can become owners of Walmart, Whole Foods or Kroger.

• These 5 magical money moves will have you climbing the U.S. net worth ladder in 2024 — and you’ll be able to hit each step in minutes. Here’s how

But sometimes stories of internecine strife can hit especially close to home – literally.

In an anonymous thread on Reddit, someone shared how their mother, who died in 2018, left her house to her and her two siblings.

The Redditor claims he bought out his siblings only to watch them waste the money on expensive luxury items.

Last year, he and his wife sold the house, but by then the value had nearly tripled. Now his brothers and sisters want their share of the income. “My two siblings feel I owe it to them to share in the profits I have made,” he wrote. “It’s become really toxic and most of my family is on their side. »

The Redditor insists he did everything by the rules, so why are those close to him throwing the book at him – and who’s right? Fortunately, there are some tips for handling property inheritance between siblings.

The Key to Successful Estate Planning

Estate planning is more than a legal document: it also involves special consideration of family dynamics.

It gives you the opportunity to clearly express your wishes and outline all financial, medical and personal decisions. This can help your loved ones avoid any future conflicts and confusion.

But according to a 2023 study by LegalShield, nearly 60% of Americans don’t have a will — and that’s despite the fact that 90% of those surveyed recognize the importance of creating one.

This raises a key issue that estate planners and attorneys bring up time and time again: communication.

Ideally, immediate family members come together to have an open and honest discussion about a loved one’s estate plan. This provides everyone with the opportunity to ask questions, express concerns, or seek clarification.

These discussions can take place one-on-one or in a small group. If disagreements persist, a financial professional can step in to help smooth things over.

What to Consider When Inheriting Property with Siblings

Inheriting property with a sibling is not necessarily a straightforward process, even when the stipulations are set out in a will. For example, what happens if a sibling refuses to sell?

It is not uncommon for there to be disagreements between siblings over how to divide property.

According to an Ameriprise study, while only 15% of siblings argue over financial disputes, among this cohort, 68% of financial disputes were related to their parents, which includes wills and inheritances.

So what steps can you take to help you navigate this transition with your siblings?

Learn more: Young, wealthy Americans are ditching the turbulent stock market — here are the alternative assets they’re banking on instead

Get a property estimate

Although not always necessary, obtaining an appraisal can help you assess (and prove) the value of the property to the IRS at the time of inheritance.

The appraisal will also take into account recent sales of similar properties, market trends, and details of the home, including its size, condition, and amenities.

This can be helpful in helping you and your siblings decide what you want to do with the property. For example, you can sell it and split the money equally or turn it into an income property and split the rental income.

Another option is to keep it as a family vacation home. In some cases, one of the siblings may wish to live there for a while.

Get post-inheritance arrangements in writing

Even if you reach an amicable agreement to divide real estate assets, the Reddit example above shows how discord can render a verbal agreement useless.

Experts say that after a property sale, you will need a legally binding document that states the transaction is final and that other family members cannot pursue future gains after the fact.

If everyone is unsure of what to do with the property, consider some of the following questions:

• Does the house still have a mortgage?

• What repairs/maintenance need to be done before selling?

• What are additional annual home expenses – and who pays them?

QuickenLoans encourages family members to “keep organized notes of all terms and agreements of the sale, which can avoid misunderstandings between the parties.”

Hire a qualified expert

Estate planners, probate attorneys and independent executors can help siblings determine how the property will be divided and sold, whether between them or to a third party.

In cases of extreme disagreements between siblings, hiring a bank or similar institution as executor “will often help avoid fierce competition and conflict between family members,” according to attorney H .Van Smith.

Having a lawyer present can help prevent conflicts from escalating and help you reach a solution that suits everyone. Ultimately, the presence of a third party might just save the day.

Ultimately, you can sell a house and make a tidy profit, but that’s not the same as reaching an out-of-court agreement with siblings.

What to read next

This article provides information only and should not be considered advice. It is provided without warranty of any kind.