Heirs Owning Real Estate Jointly

[gwrdriver]

What is the name of your state? Tennessee

My siblings and I (all adults) each recently inherited an equal-share interest in a parcel of real property. For the foreseeable future (at least two but not more than four years) we intend to hold the property as tenents in common ( . . my guess.) It will generate rental income and incur expenses. Each sibling has at least one heir, either a spouse, or adult child/children, or both. It is our wish that should any of us die before the property is sold that the surviving siblings shall not be forced by heirs to sell or divide the property, until such time as the surviving siblings jointly agree to sell the property and distribute the proceeds. I also assume that to complete the job and make it all work as we intend it each sibling will need to have a corresponding will or trust in place.

My question is, what "partnership" vehicle would be most advantageous for this from a legal standpoint?

 

[latigo]

Whether you intend to or not you and your siblings do hold the parcel of land as tenants in common, or in what is known as an estate in cotenancy.

And one of the features of such an estate is that unless there is a binding tenancy in common agreement (TIC) or other enforceable contract between the co-owners providing otherwise, neither cotenant can compel another cotenant to sell their respective interest.

Each co-owner’s estate and that of the successor owners of the estate are totally independent of all other co-owners.

But I will say this. If I were representing the personal representative of the estate from which his inherited property was derived, I would have argued strenuously that it be sold during probate and the proceeds distributed rather than in fractional undivided interests! Because that is the worst possible way to hold title to land.

So don’t make it worse by drawing up some form of partnership arrangement. If you’re attorney advises that the best way to manage the property would be to place in an LLC or corporation, then fine.

But never get involved in a business partnership! That is unless you want to walk around with a financial albatross hanging from your neck

 

[TrustUser]

being that i am familiar with trusts, i will offer that as a solution.

language could be put in the trust, regarding the original beneficiaries (you and your siblings), and your heirs.

you might want to use a title holding trust, with someone other than you beneficiaries as the trustee.

in a title holding trust, the trustee does not do anything but to follow the instructions of the beneficiaries. so usually that is just signing documents when sold.

someone needs to take over management. while one of you siblings could do that, i would suggest contacting a property management company who also sells real estate or has a contact for sales.

in that way, the person managing it not only has experience, but a reason to do a good job for you (he may make some sort of commission when it is sold).