How to Split a House in Half?

August 28, 2024 8:16 AM

Our mom passed away a while back and my sister and I inherited the family home, 50/50, which my sister lives in (I am overseas). Ideally she'll sell the house and we'll both walk away with half of the value, but since she lives there, I'd like to be considerate and propose other ways we could work this out, should she prefer to stay. What alternative agreements do folks/ siblings work out in cases like this?

A few details:

Let's say the house is worth $400K.
I don't believe my sister has income, and I don't know about any savings.
We also inherited a third of the value of the house each in cash.
We have an elderly uncle from whom we *should* inherit a reasonable sum + small property (although this would decrease significantly if he goes into a home).
My sister isn't currently in great health, so for now, her jumping through the hoops required to sell the house is unlikely (I don't know how this will change in the coming months).

So best case scenario for me is that she sells the house and we both walk away with half of the cash each: worst case scenario is that she stays in the house indefinitely and I get nothing. Are there some in-between scenarios? What I'm trying to do here is do my due diligence and pool all the possible options, as a starting point for a discussion about what next steps are viable.

posted by 4th Matryoshka Doll to Work & Money (29 answers total)

I think a very relevant detail, especially since you said your sister is in poor health, is whether or not she is capable, willing, and able to take care of the house she's in. Maintenance, taxes, grounds keeping, snow shoveling, gutter cleaning, dusting extra, empty rooms, furnace maintenance, etc are all "hoops to jump through," as well. There are on-going costs in money and time for her, which might be alleviated in a smaller or different living situation.
posted by AbelMelveny at 8:24 AM on August 28 [19 favorites]

You get it assessed and then get half of that via her taking out a loan, or she pays you rent equivalent of that value.
posted by The_Vegetables at 8:26 AM on August 28 [24 favorites]

You can agree to sell her 1/2 of the house. So she owes you $200k. She can give you $100k cash, so she owes you $100k. You can take payments on that from her, or she can take out a home equity loan on the property and make payments to the bank.
posted by hydra77 at 8:27 AM on August 28 [13 favorites]

If your sister had some savings, it's fairly common to "buy out" the other person, so she would pay you the $200k that your share is worth. You'd need to negotiate an exact value.

Alternately, you could ask your sister to start sending you monthly payments equivalent to a 30 year mortgage at 0% interest for your half the value. For 200k at 0% interest for 30 years, that's $556/month. That's cheating you out of some of the value setting the interest at 0%, but it's more than fair to your sister.

If she really has no income, and you're not willing to force her to sell and move, I think your best option is to tell her to stay for free. Agree that if/when she sells the house you get half and just assume you'll never see anything.
posted by Eddie Mars at 8:28 AM on August 28 [11 favorites]

worst case scenario is that she stays in the house indefinitely and I get nothing.

While living there, as long as she keeps the house well-maintained and in a state of good repair, you'll get half of whatever value the house has appreciated to when it is sold at some future date. Depending on where the house is, that could potentially be a very lucrative investment. You could even consider the money she spends on upkeep/taxes to be her "rent".
posted by RonButNotStupid at 8:33 AM on August 28 [10 favorites]

I might take less than half the value of the house in this situation and walk away, if that’s all that she can easily manage. It would depend on the sister’s personality and the cost of living of the area (whether house or cash are worth more to her.)

You might pay a professional to arrange and sell the house if she is willing but unable.
posted by michaelh at 8:52 AM on August 28 [3 favorites]

I don't believe my sister has income, and I don't know about any savings.

What funds is she using to live off? (Food costs, utilities, transportation, healthcare, etc.)

How large is the house? Can she rent out part of it?
If she doesn't want to sell, would she feel differently about renting out the house and splitting the income from that?

What are housing costs like where she is? How long would she realistically be able to live off the proceeds of selling the house?

Had she been your mother's caretaker? Has she been getting paid for that?

Is her poor health a temporary issue, or one for which she should ideally be getting disability or other assistance? (If the latter, and she's not on any assistance programs, and isn't likely to have the energy to jump through all the hoops that they require, thinking about how to help her with that should be part of this process.)


What I'm trying to do here is do my due diligence and pool all the possible options, as a starting point for a discussion about what next steps are viable.

I think it's not a bad idea to think about this some, but I'm not sure it's necessary or even helpful to think too much about this before having an initial conversation with her. I would recommend first finding out if she even wants to stay, what she thinks the options are, what resources she has, what her priorities and needs and fears are. Tell her what your priorities and needs (and fears?) are. Don't try to convince her or argue with her or anything - make it clear that the initial conversation is just for everyone laying out their side of things, and then everyone goes off and thinks about it for a while now that they have a fuller understanding of how everybody actually sees the situation.
posted by trig at 8:59 AM on August 28 [12 favorites]

There's a lot of great comments above, so I'm going to focus on this part:
"My sister isn't currently in great health, so for now, her jumping through the hoops required to sell the house is unlikely (I don't know how this will change in the coming months)."

Selling a house can be really fast and easy if you don't care about maximizing the sales price (aka if you're fine with a bad deal as a seller)

But I think what you may want to focus on is coming up with alternative living plans for your sister. She's not in good health. She has to live somewhere. If it isn't this house, where would she go? Could she buy another house (no income - seems unlikely)? Will she rent a home (no income - seems unlikely)? It's not really your problem, but in practice if you can't come up with a plan on your own, can she?

Until part is resolved, this situation is stuck.
posted by Mushroom12345 at 9:02 AM on August 28 [5 favorites]

This situation might be in my future. Should she prefer to stay, then it depends on how nice you are. Theoretically, she could stay and then pay you half of the market value of the rent and half the property taxes. Utilities and upkeep, like any landlord, are negotiable in lieu of rent.

If you're nice, let her stay there for free/reduced value, keeping in mind the issues of upkeep as mentioned above. If you're less nice, go to a lawyer and force a sale, claiming that the current situation dictates it (upkeep, property taxes, your not wanting to live there, etc. etc.).

On preview: good point from trig--was she a caretaker? That is value, taken into consideration by a court.
posted by Melismata at 9:04 AM on August 28 [1 favorite]

good point from trig--was she a caretaker? That is value, taken into consideration by a court.

If so, this could be a compelling argument in favor of letting her buy you out at a reduced rate. A court in the U.S. is not going to disturb a decedent's distribution of property just because one of the heirs did the caregiving, but an ethical person would take that into account in a situation like this.
posted by praemunire at 9:14 AM on August 28 [5 favorites]

Figure out how long you’re willing to wait to get your share. What I mean is that the amounts are presumably big enough to make a difference to your own financial future, retirement plans etc. So what were your plans for your inheritance and how long you are willing to postpone them to wait for your sister to agree to a sale.

How much would outside care for your parent have cost? If she provided care for a long time, I might suggest to settle for all the cash she is due even if that is less than half the expected proceeds. She can then figure out her own situation in her own time without you being in limbo.
posted by koahiatamadl at 9:20 AM on August 28

There are a lot of intermediate options and one that doesn't require her to pay you anything now would be kind of like a reverse mortgage on her share of the house. Figure out a) what the house is worth today and b) what a reasonable amount of rent / contribution for her would be every month -- and then keep a running tally of months of rent. When the house is eventually sold, you get your half of the value plus the value of the running tally. Whether you apply interest to the running tally is another point of discussion.

The other thing you have to consider, though, is how will taxes be paid and upkeep be paid for during this time if she has no income or savings.
posted by jacquilynne at 9:25 AM on August 28 [3 favorites]

She lives there for free or for a nominal monthly fee, but if she moves before she dies or if she were to die, you get the full value of the house.
posted by JohnnyGunn at 9:28 AM on August 28 [2 favorites]

> We also inherited a third of the value of the house each in cash.

So you both have ~$133k in cash, and a notional half share in a $400k house.

I guess your dream outcome is that she's sick of living there after all this time, and would love to sell up immediately and move somewhere else that she could buy for all-cash at a max price of $333k minus everyone's fees. Maybe not impossible. Worth asking her.

If that's not her short-term goal, you probably have to weigh up how badly and how quickly you need the additional $200k, then take the necessary measures. You (or your estate) will get it eventually.
posted by rd45 at 9:29 AM on August 28

The in between scenario is the scenario that already exists: you both own the house, which means you both get to live in the house and both get half the value if you sell and half the liability and cost of maintenance and taxes. Like, currently, you both own 50% interest in the house. You may not be able to force your sister to sell the house just because you want to cash out now - it may not be “being nice” to “allow” your sister to remain, but just kind of part of what the legal situation as it stands allows.

Your sister doesn’t need to pay you “rent” to stay in a house that she has an ownership interest in unless she wants to exclude you from staying there also. And she may not want to take out a loan to buy you out; I wouldn’t want to do so in her case. It would appear to me to be forcing me into debt, with interest, just because you were unwilling to wait for more cash when you already received a generous cash inheritance.

If you want cash now, I suppose what i would think would make the most sense from a justice standpoint would be to suggest she give you about 100k in cash - most of the cash settlement - and consider that half a buyout, giving her a three-quarters interest in the house, and you a one quarter interest in the house. Then agree to a payment structure or sale payout for the remaining 100k. I would also allow her to deduct cost of maintenance and taxes from the 100k remaining.
posted by corb at 9:48 AM on August 28

You may not be able to force your sister to sell the house just because you want to cash out now - it may not be “being nice” to “allow” your sister to remain, but just kind of part of what the legal situation as it stands allows.

In most, though not all, states, a co-owner of a property can petition for partition, essentially a forced sale.
posted by praemunire at 9:56 AM on August 28 [4 favorites]

Do some questioning. If she has no income, has she worked, will she have Social Sec. benefits some day? Is she ill enough to get disability benefits now? If it's a large house, would it make sense to sell it and buy a smaller house? Condos have fees, but might really be the best option for her. A smaller home is less work, lower taxes, less serious maintenance that she may not be prepared to tackle. You might look unkind pushing for the sale, but the result might be better for her.

I think a lawyer could make it so the house gets sold and a condo is purchased. Any of your half of the house sale that goes in to the condo is secured by the condo with a mortgage with low but not ridiculous interest. This delays funds to you, a lot, but you might be okay with that? She could agree that if she were to receive any future funds, she'd pay you back at that time. Who's the executor of the estate? A good elder lawyer may have more ideas.
posted by theora55 at 11:01 AM on August 28

I have been in a similar but not identical situation and it got 'complicated' in a way I never would've predicted. Messy is too weak of a term to describe what happened. My advice is to sell the house, split the proceeds and help your sister get in a situation where someone in poor health has help.
posted by bluesky43 at 1:06 PM on August 28 [6 favorites]

My mom bought out her sister when their mom died. I don't know if my mom had cash (like from an inheritance? there wasn't much) or got a mortgage, but you can get a mortgage for buying out a sibling in this situation.

My general advice here is to get it settled legally asap. The longer it takes to settle legally, the more complicated it can become, and the more misunderstandings there are. I think my uncle is still mad at my dad from when my grandfather sold a different house to my dad in ... 1971?

If you decide to keep the house in both your names and she lives there, it also seems like it would be good to get that written up legally too. The less that's formal and official, the more misunderstandings and legal complications can happen down the road.
posted by bluedaisy at 3:00 PM on August 28 [3 favorites]

In most, though not all, states, a co-owner of a property can petition for partition, essentially a forced sale.

This is true, depending on how clever your mother (or her attorney) was at setting up her will, but that doesn’t mean you would actually get the value you were seeking even if you won the action. Even in those places, you can’t always force your *sister* to sell even if you can force the *property* to be sold - (you might need, for example, to do a forced auction through the sheriff’s office rather than a normal sale) and the court would still potentially be allowed to rearrange the value of the sale based on fairness factors if your sister called for an accounting. And litigation is *expensive*. If I were the person in the position of being thrown out of my home by a sibling in the wake of a parents death, it would be in my interest to make the process as lengthy, expensive, messy, and inconvenient for that sibling as possible, because why not? And you could easily find yourself becoming the primary villain of your family even if you are legally in the right.

In my own family, one of my relatives died intestate after clearly verbally expressing her wishes about her estate. One of her legal intestate heirs sued the other (verbally approved) heir for a portion of the estate, which it was their legal right to do. The entire extended family has essentially cut that person off from all social and familial support - their name is lower than dirt and it is used as a byword for an ungrateful relative. That was over eight years ago, and people still spit when they mention that relative. This may or may not be the position you wish to be in.
posted by corb at 4:31 PM on August 28

As others mention, real estate + family can be super messy, and I strongly suggest you and your sister plan to sit down at least twice. First, to discuss what you would ideally want to do, your own hopes and dreams for the windfall and your sister's hopes and dreams for the windfall. At this session just reminisce about the house, family and let yourself be hopeful for your futures. Then at the second session start figuring out how both of you can get there. This can get antagonistic, but it really doesn't have too, it is possible to ensure stable housing for your sister in the house or elsewhere, but you need to know her plans and to talk to her.
posted by larthegreat at 4:57 PM on August 28 [4 favorites]

I'm basically six months into this situation. My main concern for you is (this is assuming you have a familial relationship) that your sister has no income.
Wherever she lives she has to eat right?
The other defining question in this equation is, was your sister your mothers carer? That can come with legal or moral impllications and/or expectations from her side.

I think starting from asking your sister what her plans are, openly, is a really good first move. I didn't do that with my sibling and he's a little shell-shocked still and hasn't really internalised the idea that he will be moving soon, so all the processes like downsizing are a struggle.

While he does work his income isn't large and he may not be self sufficient going forward and may need (also be entitled to) some type of sheltered accommodation. The plan at the moment is to sell the family home, buy something much more manageable for him, but have that property owned by a trust for people in his situation.

However, we have inheritance taxes and sales taxes and things, but he would be exempt from them as the continuing resident of the house, so we are considering having him inherit the house full out, me inheriting the liquid assets full out, and him gifting me the difference (to the gift limit annually). Maybe I'm insane, not quite sure. I sure feel it and am following this thread closely.

While he could stay on and rent out and make a tidy income from that, the house has already deteriorated in the six months he has lived alone there. If your sister is capable of minding the house and being a landlady, then investing some of the liquid in creating a self contained flat could provide you both with income while letting the house continue to accrue value.
posted by Iteki at 11:25 PM on August 28 [3 favorites]

My mom and I did this after she divorced my dad and moved across the country to take care of her aging parents. Both names were on the title. I financed half the value of the home as a mortgage. I took care of maintenance and repairs and we split costs when there were expenses. If your parent handled this, talk about expected labor. For clearing out left- behind items, will you visit and help with labor or is she hiring someone? Who is mowing and clearing gutters and storm debris?

What is your family dynamic like? After my grandparents both passed, my mom temporarily moved back with me while being on deck for knee surgery AND we were selling the house as-is in a hot real estate market. She thought I wouldn’t mind if she had a contractor replace the roof -it was an unexpected expense and we worked it out. She thought the asking price was too high after we had a lovely family with adorable kids come through who asked for a $20000 lower purchase price, so she got an estimate and I patiently explained that this was our investment (her retirement) so we cannot give people $20000 discounts. The house sold for $5000 over asking price, but she was sore for about a year that we didn’t sell to The Nice People Who Stopped By. We are fine now, but talk to your sibling and maybe work with a community mediator to review, brainstorm and come up with an agreement for changing the deed and having a plan for a range of circumstances. I was getting married and moving with a school age child. Both of you need to think this through, come up with a plan and put it in writing.
posted by childofTethys at 4:01 AM on August 29 [1 favorite]

If she can perceive and accept that staying there long-term is not a viable option, perhaps you can enter into an agreement (preferably written by a lawyer, and it has to be on paper and signed) for her to stay there for x years under the current arrangement, with a sale at that point. That would give her time to make an organized exit.
posted by yclipse at 4:15 AM on August 29

I should mention that our house was full of stairs so my mom was not a candidate for staying in the house. Elder law attorneys are the type of lawyers who will create trusts for people with disabilities. They also tend to know real estate attorneys/title companies that will work with complex family real estate matters -if you are in the US. The community mediator reference is to get you both talking. The modest nest egg that came from the sale is still funding/supplementing her retirement more than 20 years later.
posted by childofTethys at 4:32 AM on August 29 [1 favorite]

you can get a mortgage for buying out a sibling in this situation

This is what my dad did with his siblings and their family home.
posted by carrioncomfort at 2:24 PM on August 29

the court would still potentially be allowed to rearrange the value of the sale based on fairness factors if your sister called for an accounting

If the mother owned the home and left them each 50% ownership in a written will, there's not going to be an accounting. There's no fiduciary duty and no interest to account for. (Again, assuming U.S. I can believe other jurisdictions handle it differently.)

Bluntly, leaving the home in the care of a person with no income and poor health is a fast track to trashing the value that could otherwise be extracted and split between the two. It's not clear to me whether this is a person completely/constitutionally/permanently incapable of caring for herself or just someone who's, e.g., unemployed because she's been caregiving and battling severe depression for the last three years, and probably the next steps afterward would depend on where she lands on that continuum, but either way, leaving her to live alone in a house means it will start deteriorating immediately. And that's assuming she remembers to do things like pay her half of the property taxes, insurance, water, etc....this is easily the kind of scenario where you get caught up in a tax lien or water bill foreclosure, and if you think family disputes aren't fun (partition proceedings generally do not proceed from a place of amicability, for obvious reasons), imagine spending the next three years fighting the city trying to keep the title.
posted by praemunire at 7:48 PM on August 29 [2 favorites]

One of my sisters lives with my father, and he would have to go to an expensive memory care facility if she didn't. Fortunately, my father has set things up so that she is the sole inherited of the house, but if he hadn't then I would just sign my share in it over to her because IT'S HER HOME and she's put in years of caregiving work to earn it.

If your sister was performing caregiving duties for your mother and is capable of continuing to live there alone then I would just give her the house.
posted by Jacqueline at 1:35 PM on August 30 [3 favorites]

Just wanted to say, that compensating a relative for care as is referenced above is the fair and right thing to do. So many relatives seem to think that this is just someone's duty to care for them without considering the consequence to that person.
posted by bluesky43 at 4:06 PM on September 4