Sharing Ownership Of The Home
Your first thought upon inheriting a home may be to decide which sibling will remain in ownership – but sharing ownership is possible and can even be enjoyable when the details are properly negotiated.
Dividing Inherited Property Between Siblings
If you’ve decided to continue sharing ownership of the home, you will need to discover the terms under which the house has been left and understand the key differences between tenancy in common and joint tenancy. It’s possible to alter the terms of your ownership to either of these options, so it’s important to know the facts to decide which structure is best for you.
Tenancy In Common
When the title is held as tenants in common, each owner possesses interest in the property, which can be divided equally or unequally. Even if one person owns a higher percentage of the property, all owners have a claim – meaning no one individual can claim ownership over it.
Each owner can sell or transfer their share in the property to another person without needing their co-owner’s approval. If a co-owner passes away, their interest is automatically passed to their heirs.
Joint Tenancy
Unlike tenancy in common, joint tenancy means that all co-owners possess equal shares – or an equal amount of interest – in the property. Ownership can’t be passed down to heirs because, in the event of a co-owner’s death, the sibling’s share of ownership is automatically passed to the surviving co-owner. Shares in the property can’t be sold without the consent of all co-owners.
Like tenancy in common, joint tenancy allows you to transfer your shares to another person – however, when this happens, that person is unable to enter the joint tenancy and instead enters into a tenancy in common ownership structure with the remaining co-owner, terminating the joint tenancy.
Renting The Inherited House And Splitting The Profits
If neither sibling wants to sell the family home, renting it out could be a positive, profitable approach for everyone involved. In fact, it could even be possible for one or more siblings to live in the house alongside any renters.
