What I Should Do About the House
My father passed away about 20 years ago. Just three years back I went through probate. The house was in my fathers name and he had three kids. One of the other kids signed over to me his share, and now I have ownership of a majority of the property. I have been paying taxes for the last 25 years. What should I do? Sell or keep the house? Also, I paid the mortgage off years ago. What to do?
The situation is complicated. There are many different issues to sort out. The following are only some of them. You should consult with a local real estate attorney and title company and get advice on how to address the following (and hopefully they can help you identify any other issues):
- Title. Title is the ownership of the house. You have to have clear or good marketable title if you want to sell the house. If your information is correct then you should own 2/3rds of the house with a sibling or 1/2 sibling (your father's other child). The deed should reflect this as should the title policy (this insures your ownership in the property - not a protection against liability). If, when your sibling or 1/2 sibling gave or sold you his/her interest a deed was not signed, you may need to have the real estate attorney address and correct this. When your father died, his share should have passed to his heirs through probate of his will (or intestacy if he didn't have a will), or the deed to his house may have listed the 3 of you as joint tenants with rights of survivorship. It is not clear what the facts are. You should have these details clear and documented so that you will be able to sell the house if you choose to do so.
- If your father died 20 years earlier and the deed stayed in his name without transfer, there could be some issues as to how the probate was handled. Your real estate lawyer might be able to give you some initial advice, but then you might have to consult a probate attorney. The advice might depend on how the deed was worded.
- If you paid the taxes and expenses you might be entitled to reimbursement from the sibling or 1/2 sibling that still owns an interest in the house. It is not clear whether the sibling or 1/2 sibling that sold to you his/her interest could still be required to contribute (the right you might have had for a reimbursement of his/her share may have ended when he/she deeded you his/her interest in the house). Your real estate attorney can advise you on this. Consider, however, that even if one or both of them should legally have to reimburse you, is it worth pursuing? What might that do to the family relationship?
- Who has been using the house all these years? If you, there may be a concept called "adverse possession" that you should discuss with your local real estate attorney. If you used the house for 20 years since your father passed and treated as if it was yours, your sibling or 1/2 sibling might be precluded (estopped) from arguing that he/she still has an interest in the house. Again, your local real estate lawyer can advise you. If adverse possession is the route to go, you would likely have to have the attorney bring a court proceeding.
- You should also discuss with your accountant any tax deductions you've taken on the house given the uncertainty of ownership. However, since you owned an interest in the house you probably should have been entitled to deduct whatever property taxes you paid. You should also review with your accountant the tax consequences of your obtaining the additional interest. If you purchased it you will have a tax basis for the amount paid and may be subject to reporting requirements to the IRS for amounts paid, etc.
- Ask your real estate attorney whether there are any formalities, taxes, transfer fees, etc. that still need to be addressed in consummating properly the transfer from your father, to his estate, to the three children and then from the one sibling or 1/2 sibling to you.
- How has property, casualty and liability insurance been handled given the confusion of ownership? Check with a property insurance agent and make sure you have all this correct. Your co-owner should probably be listed on the policy as a named insured as well.
Good luck. Do it right. Hire the experts you need and go through all the issues until you're sure you have everything cleared up. Then, when you know the facts of all the issues that might be involved you can better assess the implications of selling, renting, etc. You should then talk to a good local real estate broker about the current market, sale and rental prospects, etc. to make an informed decision. Bear in mind that the sale decision, while largely market driven, is affected by title issues, tax basis, and some of the other factors discussed above.