Meeting the Challenges of Inherited Property

As Saul Bloom said, “I want the last check I write to bounce.” That’s the character played by Carl Reiner in Ocean’s Twelve.

After seeing and reading about an extraordinary number of siblings who battle each other over inherited property, I’m beginning to sympathize with that attitude. Maybe it’s better to liquidate everything and live life as grandly as possible. Let the kids take care of themselves.

Parents work like dogs for years. They scrimp and save enough to buy some investment property, or at least to pay off their home. That way, they reason, there’s something left for the kids.

The parents’ intentions are righteous but the more I see, rather than being a welcomed free asset, the real property becomes a source of contention between brother and sister or between cousins.

Some of the heirs view the property as a source of ready cash (the sell-it-now group); others see this an opportunity to get the family homestead at a fraction of the fair market value (living in Tara); still others envision a long-term rental, bringing in steady, reliable
income (become small-market Trumps). Regardless of the view, too often there’s not unanimous agreement.

So, what do you do with the property?

If the owners can’t get along, then the only real alternative is a partition lawsuit. The California Court of Appeals, in Cummings v. Dessel, recently considered the results of a partition action brought by one co-owner of property against the other two owners.

The Court defined what partition is.

“The primary purpose of a partition suit is . . . to partition the property, that is, to sever the unity of possession. Partition is the procedure for segregating and terminating common interests in the same parcel of property. Partition is a remedy much favored by the law. The original purpose of partition was to permit cotenants to avoid the inconvenience and dissension arising from sharing joint possession of land. An additional reason to favor partition is the policy of facilitating transmission of title, thereby avoiding unreasonable restraints on the use and enjoyment of property.”

The goal behind partition, thus, is to end the common ownership of the property. The Court isn’t going to make brother get along with sister. Rather, like Solomon, the Court’s going to cut the baby (or in this case, the property) in half (or some other fraction). Generally, this is done by forcing the sale of the property after the Court has determined what percentage each owner receives. This is often the subject of the most fights. One side accuses the other of shirking the duties of a responsible co-owner. Mean things are often said. The results are that one or more of the owners has lost his/her interest in the property and everybody has stopped talking to each other.

What a mess. You’ve severed ties with each other. Everyone has spent a ton of money on attorneys. And, more often than not, the conclusion isn’t really what you wanted.

Gee, thanks Mom and Dad. ©

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