Dividing inherited property – the most common difficulties

Mr. Johns, what advice would you give to heirs who have to divide an inherited property between several parties? What is the best way to go about it in order to reach an agreement quickly?

" The first question that naturally arises is: what is the property worth? This means that the first step in this context is to consult a real estate agent or expert to determine the value of the property—and not just a rough estimate. You could also say, we'll look it up on the Internet first or maybe look at a few comparable properties in the area, but that's no use, because a difference of $40,000 or $50,000 in a dispute between several heirs means that if one of the heirs wants to keep the property, they would have to pay the others that much more"

so, first a valuation report should be prepared. What happens next once the value of the property is known?

from a legal perspective, the most common difficulty is finding a value that all heirs can agree on, so that they can say, "OK, if this is the value, then we can agree on a settlement plan. " Either one of the heirs takes over the property or the property is sold, and after the registered encumbrances have been paid off, the respective share of the remaining proceeds from the sale is paid out to the members of the community of heirs."

How can heirs find out what encumbrances still need to be paid off, and where are they registered or listed?

"You cannot see the actual amount of the encumbrance directly from the land register extract. If the property is encumbered with a land charge, i.e., a loan has not yet been paid off, you can find this out from the loan agreement. At the back, there is a monthly breakdown of the monthly payments, so you can see exactly how much the encumbrance from this land charge is for a particular month. It may also be the case that, for example, a building society savings agreement is still entered in the land register in second place in section 3, because the deceased may have renovated the bathroom and kitchen with a building society savings agreement or bought a new heating system at some point. You then have to look at what still needs to be repaid. With all these lists that you draw up and the results, you can then start thinking about the next steps.

So you subtract the liabilities you have identified from the determined property value, and then you know what there is to distribute?

"Yes, and only then does the question arise: Will it be sold? Does one of the heirs want to keep the property? Can the person who "keeps" the property pay out the others in full, and how do you determine this payout value? Before initiating an actual division of assets, I strongly advise that you consider these issues carefully and that all parties involved first clarify the following: What is the actual value of the estate?

Do you need a valuation report or professional advice and support in selling an inherited property? Contact us! We will be happy to advise you.

 

 

Not found:

• mosler-partner.com: Sven R. Johns
• aktiv-online.de: What is a community of heirs?
• ratgeber-erbengemeinschaft.de

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.

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