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How to resolve property inheritance disputes - Your options and common resolutions
Losing a loved one is distressing, and this can be heightened if there is a family dispute over the inheritance of a property. Inheritance disputes involving real estate have become more common and complicated. Rising house prices and more complex family structures have driven the number of disputes. According to figures released by the High Court, the inheritance dispute cases have surged in recent years with a rise of 47% in 2019 alone.
The legal costs of bringing a claim can be high. Mediation and alternative dispute resolution (ADR), can be a more economic solution as well as being a less distressing route to consider when a property inheritance dispute arises.
This guide explains how to resolve property inheritance disputes through ADR, and answers common queries on resolving property inheritance disputes.
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What are the common causes of a property inheritance dispute?
Property inheritance disputes often involve long-standing issues between family members coming to a head, compounded by legal issues.
The most common causes of property inheritance disputes are:
If a relative has died and has not left a Will
“Dying intestate” means that a will has not been drafted by the deceased or there is no valid will. Often, if a relative dies unexpectedly without leaving a will, families find themselves in disputes about who should inherit the deceased’s estate including a property or properties.
Being left out of a Will or disagreements over a Will
The validity of the deceased’s last wishes can also be disputed for a variety of reasons. These include a lack of mental capacity when the will was made, undue influence from a particular party, or errors in the way the document was drafted or executed. These disputes often occur when a close relative is completely left out of a Will, and legal challenges arise under the Inheritance (Provision for Family and Dependants) Act 1975. This piece of legislation also makes provision for certain individuals to apply to the court for inclusion in a will. There are certain prescribed reasons permitted for such a challenge, such as an individual being financially dependent on the deceased or sometimes an implicit understanding that the deceased intended to make an individual a benefactor, affirmed before witnesses.
Siblings in a dispute over the rights or who owns the assets to a property
It is common for one sibling to believe they have been shortchanged in the Will or trust. For example, a sibling who has spent a long time caring for an ageing parent and used their own funds to care for them may believe they should receive more from their parent’s estate than the other party.
Disagreements over the sale of inherited property
Disagreements over the sale of property commonly occur between siblings who have different wishes for the future of a property. If an economic disparity exists between the heirs to an estate, tension can arise between the wealthier party who may be able to hold onto the property and the less privileged party who wishes to sell due to their financial need.
How to deal with inheritance disputes over property
Should a dispute arise, being able to resolve the matter amicably is usually the best outcome. However, if you have reached the point where this is no longer possible, it is time to seek legal advice.
Using mediation in a dispute over inherited property
Many family inheritance disputes can be resolved through mediation. This process is a “without prejudice” procedure that provides a forum for bringing resolution to a dispute by negotiation. It involves appointing an unbiased neutral third party as a mediator. A mediator does not make a decision but simply facilitates the opportunity for a reasonable discussion where all sides can air their views and reasons for the challenge. It is hoped that the discussions will lead to agreement. It is usual for your solicitor to attend the discussions.
Mediation can help save costly court proceedings as well as irreversible damage to family relationships. Mediation is a voluntary process, so everyone involved in the process must be willing to come together and work to achieve a compromise.
The outcome will usually be in the form of an offer from one party that the other party deems as acceptable. If you are a party making an offer, you should explain the rationale to the mediator, including the value. The final figure will usually be within the bounds of the best and worst-case solution of that which a party is seeking.
You can read more about the benefits of mediation here.
The lawyers in Giambrone’s real estate team are able to assist in resolving a property dispute with alternative dispute resolution (ADR) which is similar to mediation in that an independent unbiased arbitrator is appointed, however the arbitrator will make a decision which is final and binding to settle the dispute. Using the expert dispute resolution service offered by Giambrone can help limit the costs and guide you on your best options. Giambrone can provide a thorough understanding of the different aspects of litigation and what impact it can have on yourself, your family and your future.
To find out Giambrone can help, you can request a call back here.
Common resolutions in disputes over inheritances involving property
The following resolutions are common when a dispute is resolved through ADR, mediation, or court:
- The property can be put into liquidation, leading to a share of the price. If a property is empty, a court will often force its sale.
- One party could buy out the other. This results in one receiving the property with each receiving their share of the value.
Frequently asked questions: resolving property inheritance disputes
Can a sibling force the sale of inherited property?
No. All inheritors must agree to the sale. If more than one person has inherited a share of the property, it can be beneficial to make an agreement to cover wishes for the future of it.
What happens if there is not a will to solve the dispute?
If this occurs in England and Wales, there are laws of succession (strict legal order) defining who the benefactors are and the proportion of the estate that they receive depending on the relationship to the deceased in the following order:
- Spouse or civil partner
- Children
- Grandchildren and great-grandchildren
- Other relatives
How do you avoid inheritance disputes?
When considering the future of property, parents can express their wishes in a Will. Alternatively, they can set up a trust, using a non-sibling as executor or trustee. After a parent dies, siblings may use a mediator, split the proceeds after liquidating assets, and defer to an independent fiduciary.
How do you divide inherited property between siblings?
The easiest option is to divide the property equally. Alternatively, an agreement can be reached between all parties over each sibling’s share.
What happens when siblings inherit a house?
When siblings inherit a house, they will most likely own it in equal shares unless the deceased stated otherwise in their Will.
How do you challenge a Will?
Should anyone believe a will is not legally valid, it can be challenged. It is strongly recommended that legal advice should be sought to enable you to understand your options.
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