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If you are part of a group of beneficiaries (2, 3, etc.) and have inherited a parcel or parcels of real estate together, there are a variety of ways in which the real estate may be distributed.

First and foremost, if the real estate is owned by a trust, the trustee of the trust has the authority to direct how the real estate will be distributed in accordance with the language in the trust. The beneficiaries might get to voice their opinions and preferences, but it is the trustee who must execute the plan. The trustee is the person with the authority to engage a real estate agent, clean out the house, and sign a sale contract and deed.  The trustee also has the authority to determine a sale price and what purchase price to accept. 

Here are some possible scenarios:

Scenario 1:  All beneficiaries agree to sell the house and receive proceeds.  This is the easiest most straightforward scenario.  In this case, the trustee will list the house for sale and treat it like a regular home sale.  For the sale to go through, none of the beneficiaries may contest the sale price and terms, but generally, the trustee has full authority to make all decisions relating to those issues.  Once the sale is completed, the trustee will oversee dispersing the funds according to the terms of the trust.

Scenario 2:  One beneficiary wants to retain the property and others want to sell.  In this case, all beneficiaries must agree on a sale price.  The beneficiary who wants to retain the property must secure funding and ultimately buy it from the trust.  The purchasing beneficiary may get credit toward the purchase price for his/her share but the proceeds from the sale must be distributed to the other beneficiaries.

Scenario 3:  One of the beneficiaries lives in the house, can’t buy it, and refuses to vacate the property.  Unfortunately for the family, this can be a highly emotional situation, but the trustee has the duty to act in the best interests of the beneficiaries while adhering to the law.  Legally, the beneficiary living in the house becomes a non-paying tenant at the death of the grantor, and the trustee has a duty to treat him/her as such.  If the trustee has exhausted all options for incentivizing the beneficiary to vacate the property, and the other beneficiaries are ready to sell the house on the open market, the trustee may have to file an eviction action with the local court.  If the beneficiary is served properly, the next step is to get an order for eviction from a judge.  If the “tenant” still refuses to leave, the sheriff will forcibly remove him/her.  This is not an ideal scenario for dealing with other family members after the death of a loved one, however, this can be a reality for trustees who should be prepared to deal with this situation.

Whenever there are assets with multiple beneficiaries, things can get tricky quickly.  Emotions can run high when dealing with family and money and getting an experienced attorney involved in the process as soon as possible can help calm the nerves of everyone involved.