Real Estate Disputes in Estate Settlements: Understanding Heir Conflicts

Usually, the executor of an estate and the probate court make the ultimate decision regarding whether or not to sell real property.

If siblings and heirs don't get along when their loved one is alive, it's usually unlikely that their relationship will improve after his death. Even the best of relationships might suffer strain when heirs and beneficiaries disagree about how to deal with certain assets. Individual state laws are set up to accommodate these disputes, but exactly how the law accomplishes this may depend on the terms of the deceased's will, or whether he even left a will at all.

The Will

Ideally, the deceased left a will and it makes specific provisions regarding any real property she has left behind. She might give her executor the power to do with it as he sees best. She might state that she wants the real estate sold and the money divided among her beneficiaries. In such cases, most state probate courts will honor the terms of the will. The only option a disgruntled heir might have is to prove that the testator wasn't of sound mind when she wrote the will, or some other circumstance existed that would require the court to dismiss it as invalid. This is a will contest and it might be a hard legal battle to win.

Power of Executor

Even if a testator does not give his executor the authority to sell the estate's real property, state laws usually give her the right to do it anyway. However, she'd have to receive court approval first. Often, an executor must sell real estate and other assets to pay off the deceased's debts. She would have to petition the probate court before doing so, and any heir who opposes the sale can object to it. A judge would make the ultimate decision.

Property Jointly Bequeathed to Heirs

In some situations, the deceased might bequeath a piece of real estate jointly to several heirs, or she might die leaving behind real estate but no will. In both situations, two or more heirs might find that they're co-owners of a piece of property and they don't agree on what to do with it. An heir who wants to sell can petition the court for a "partition sale." Those who don't want to sell have the right to argue their position in court. A judge might approve such a sale if the real estate is a home. If it's vacant land, he might partition it "in kind" instead, dividing the land up into portions and giving exclusive ownership of each section to individual heirs.

Tips

In some states, if a judge orders a partition sale of property, it may happen without any provisions that the property must sell for fair market value. The court might auction it off to the highest bidder. It's possible for an investor to snap up property in this manner for a fraction of its worth. If you're the heir who wanted to sell, you might end up with far less cash than you anticipated.