Mom died and left her mountain cabin equally to all five children. Can we keep it, or do we have to sell it?by William J. Sweeney on 04/07/15
(Mr. Sweeney is an attorney licensed in California. The comments below are not intended as legal advice for any specific situation and may not accurately reflect the law in other jurisdictions. There may have been changes in the law since this was written. You should always consult an attorney in your own jurisdiction.)
Assuming the property does not have to be sold in order to pay your mother’s creditors, if you all agree, typically you can retain it. Whether probate or trust administration, at the time of distribution, title will typically be changed from your mother’s name to the names of all five children as equal owners.
While this may be a good idea and can possibly work well for a long time, the more people you have as “partners” in a property, the greater the likelihood there will be some disagreement at some point.
During a probate proceeding, the executor is in control, subject to a duty to act in everyone’s best interest. The same is true during trust administration when the trustee is required to act in everyone’s best interest. The beneficiaries may not agree as to how things should be handled, but as long as they are handled appropriately, the executor or trustee has control and can ultimately determine whether the property is to be sold or distributed.
Typical problems that arise down the road with multiple ownership include the nature and amount of any repairs or maintenance, as well as situations where one or more partners want out. I have found it is common for one or more partners to want to “fixup” the place, while others are satisfied with it the way it is. This can cause discord among the children. Some may not be in a financial position to expend funds to do it. Other situations occur when one partner wants to let someone else use it and the others don’t agree. Sometimes it is felt one or more partners monopolize use of the place, to the exclusion of the others.
Even if the foregoing situations don’t occur, at some point one or more of the partners will grow tired of the property and its expense, or may need the value of their share of the property for some other personal obligation. Some want to sell, while others do not. Usually the ones using it the most don’t want to sell.
While it is possible those wishing to retain the property can “buy out” the interest of the other, it is not always feasible. Depending on the personal situation of each of the children and the cost of the property, they may not have the resources to purchase the interest. Aside from that, if they can use the property frequently and only incur a fraction of the operating expense, they may prefer to continue to do so rather than to acquire total interest in the property and have to pay all the expense.
In my experience, at some point down the road the partners will either have to agree to sell the property, or one or more of the partners will bring a legal action to get a court order to sell it. While typically successful, a lawsuit does nothing to breed goodwill among the children and can result in significant expense.
Retaining a property with multiple owners should be given considerable thought before the decision is made to retain the property. While it may seem a good idea and sentimental to retain the property you were able to use as you grew up, it’s unfortunate when it creates a situation that creates tension and ill will among the siblings.
An experienced attorney should be able to point out the pros and cons of your particular situation and provide some advice on how to address the issue.
William J. Sweeney
Attorney at Law
915 Highland Pointe Dr., Ste. 250
Roseville, CA 95678