A death in the family and the related emotions tend to shine a light on certain issues. In most cases, a home that has had its place in the family for many years also carries many memories with it. When your surviving parent dies, you and your siblings have some decisions to make that can be very heartrending. Read on for some guidance on how to deal with the family home after a death.
Abiding by the Will
In many cases, the home is left to the surviving children along with the remainder of the estate. This is known as per stirpes and is meant to leave an equal share of the estate to all of the siblings (or their spouses or children). While the motivation for using a per stirpes provision is laudable, the reality of trying to divide up real estate when more than one sibling now owns it can be complicated.
Be Aware of Trusts
A trust can reside alongside a will and can be found in many estate plans. The important thing to know about a trust is that the provisions in a trust take precedence over the provisions in a will. For example, if the family home is handed down to all siblings in the will, that provision of the will is useless if a trust leaves the home to just one sibling. Be sure to determine the existence of a trust before you probate the will. Trusts do not have to be probated; therefore, any property addressed in the trust can pass seamlessly on to the beneficiary after a death.
Probate and the Home
If neither a trust nor a will exists, the probate court will decide on how to distribute the estate, which includes the family home. The court will appoint a person to be the personal representative (or executor) of the will, and many of this person's duties involve the home. The home must be maintained so that the asset is not damaged during probate. This can include making needed repairs, cutting the grass, and keeping some of the utilities running. In many cases, the home has to be appraised as to the financial value. This allows the probate court to make better decisions about its disposition.
Dividing the Home
No matter how it's done, the home must be dealt with at some point. Families have several choices as to its future, and everyone must agree. Here are a few options:
1. Keep the home in everyone's name and share any expenses. One party might live there and pay expenses or rent to the rest, or it might be rented to others with the rent becoming income that is divided.
2. One party buys the other party out to own the home outright.
3. The home is sold, and the parties divide the proceeds.
To learn more about dealing with the family home after a death, speak to an estate planning service or probate attorney.