Inheritance disputes and real estate

Inherited real estate can be a difficult matter to navigate in families with multiple children. For example, sometimes, real estate will be left to children equally to share, and then it becomes a matter of deciding how to split the property -- and this is where disagreements can arise.

It is not uncommon for certain children to want to keep a piece of inherited real estate -- like a family cottage in the mountains -- while other children may want to liquidate the property. In some cases, children may not even have a choice but to liquidate the property because they cannot afford to pay capital gains taxes, which might be associated with the transfer of the property.

If some children are able to purchase the property from the other children, and pay any associated capital gains taxes, then it could be a beneficial deal for everyone. However, a piece of real estate could become a point of contention in an estate litigation matter, especially if there is disagreement about the true value of the real estate. In these situations, estate appraisal experts and tax experts may need to be called in to resolve the matter of how much a piece of property is actually worth.

Another important issue relates to the changing price in homes. If a piece of property has risen exponentially in value since the original estate plan was created, it might be argued that an estate plan -- which formerly divided property among children equally -- might no longer reflect the true wishes of the person who created the estate plan. In such cases, it may require delicate estate litigation to establish a fairer asset distribution strategy that more appropriately reflects the original plan of the decedent.

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Lunny Atmore

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