Inherit A Share Of Your Grandparent's Home? What Are Your Options?
Posted on: 27 November 2015Share
Losing a grandparent is never easy -- especially when you find yourself embroiled in an estate conflict with your cousins while you're still grieving. While estates that consist primarily of cash, investment accounts, or other assets that are easily liquidated, dividing an estate among a number of heirs can be difficult when funds are locked up in illiquid assets like homes, vehicles, or art. Read on to learn more about your options after inheriting a portion of your grandparent's illiquid estate.
How are illiquid assets divided among multiple heirs?
When only two heirs inherit from an estate, illiquid assets can usually be divided fairly evenly by allowing one party to take a cash payout. For example, if the decedent left a home valued at $250,000 and other possessions valued at $150,000, one heir would be able to inherit the home free and clear by paying the other heir $50,000 and allowing him or her to keep all other assets.
This calculation can become more complicated when dealing with multiple heirs. One heir who wishes to keep an illiquid asset may have to provide a substantial payout to the other heirs -- and when assets consist of both valuable and sentimental items (like jewelry or a family farm) determining who will keep the item and who will accept the cash can be tough.
What should you do to preserve your rights during this process?
Because ownership in estate assets is vested in heirs when the probate process has concluded, you and your cousins will eventually become joint owners of your grandparent's property -- which means you'll need to secure agreement from all owners before taking any action (like seeking appraisal of art pieces or placing a home on the market). When opinions differ, a stalemate may result, leaving you and your cousins in a state of limbo for years.
This can mean that it may be in your best interest to encourage the executor of the estate to promptly value and liquidate any estate property before probate has closed. If none of the heirs want to keep your grandparent's home, selling this home before probate has closed and dividing the proceeds equally can yield a much higher payout (and fewer headaches) than trying to secure agreement from all cousins on a sales price and closing date.
If you've already found yourself in a legal quagmire and don't see yourself (or your cousins) receiving a payout from your grandparent's estate any time soon, you may want to consult an inheritance financing company, to discuss how to sell inheritance. These companies will essentially purchase your right to collect from your grandparent's estate on the presumption that this right will allow them to collect enough to cover the amount paid to you and an additional fee. While this may yield less than you'd be entitled to collect once the estate was settled, it can be a good way to quickly take your share of the estate and move on.