When dealing with bereavement, disagreements with surviving family members about assets that have been jointly inherited can cause further stress at an already difficult time. However, there are certain rules people should keep in mind when deciding what to do with an inherited property, and Heather Pollard, inheritance expert and head of underwriting at Tower Street Finance has explained what they are.
Inheriting a property between siblings
When inheriting a property as part of a shared inheritance between siblings, there are several things to consider before any decisions can be made on what to do next.
In terms of how an inherited property is divided, Ms Pollard said it is important to check the Will as a first step, as the split may have been dictated by the deceased.
Ms Pollard said: “If there is no instruction on the split within the Will, then siblings will need to decide how the property will be held between the interested parties, either as joint tenants or tenants in common.
“Joint tenants have an equal ownership interest with the other siblings, while tenants in common own a specified percentage of the property, which could vary between the siblings.”
READ MORE: Simple gift rule that reduces 40% inheritance tax rate on estate
According to Ms Pollard, it’s more common that “full” siblings will inherit a property equally, but in a family situation with half or step-siblings, the split may not be equal.
Joint tenants and tenants in common
Siblings who have inherited a property as joint tenants will need to obtain the written consent of all siblings if they decide to sell the inherited property.
Once the sale of the property has been completed, the proceeds of the sale will be split equally between all siblings listed as joint tenants.
However, Ms Pollard noted: “If you have inherited a property as tenants in common, you are able to sell your share of a property to one of your other siblings (or third parties) without having to obtain written consent from any other of the tenants in common.
“If all siblings that are tenants in common agree to sell an inherited property, the proceeds of the sale will be divided according to the percentage each sibling owns.”
If there is no instruction in the Will, people can find out what type of joint ownership they have by visiting the Land Registry website and using their Property Search Service to download a copy of the title register for the property.
Ms Pollard said if the title register reads “no disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court” in Section B Proprietorship Register, then the property is held as tenants in common.
Property inheritance disagreements
A common disagreement that can occur when inheriting a property as part of a shared inheritance between siblings is whether to keep or sell the inherited property.
READ MORE: Key inheritance tax rules ‘worth being aware of’ to avoid tax hit
Order of sale
If siblings cannot come to an agreement over whether to sell or keep a property, a final step would be to apply for an Order of Sale.
Ms Pollard said: “It should be noted that this can be an expensive and time-consuming process and there is no guarantee that it will result in the sale of the property. This route will also likely have a lasting impact on the family dynamic, so should always be seen as a last resort.”
According to Ms Pollard, the sibling looking to sell would need to write to each sibling who owns a share of the property, either directly or through a solicitor, explaining their case for selling the inherited property.
She continued: “Each sibling must then be given the right to reply, and if a mutual agreement cannot be reached, then the matter would proceed to court.
“The court will consider the intentions of the person(s) who created the trust, the purpose for which the property is held, the welfare of any minor who occupies or might reasonably be expected to occupy the property, and the interests of any secured creditor of any sibling before coming to an ultimate decision.”
