Can multiple heirs keep the family home instead of selling it?

Short answer: Yes—often heirs can keep the house, but doing so requires agreement among co-owners or a legal and financial plan. If heirs cannot agree, a co‑owner may force a court to sell the property through a partition action. This article explains common paths to keep the house under Maryland law, practical steps to take, and the risks when co‑owners disagree.

Detailed answer

1. How ownership usually looks after a person dies

If the decedent left a will, property typically passes according to the will and must go through probate unless title passed outside probate (for example, via a trust or a joint tenancy with right of survivorship). If no effective will exists, Maryland’s intestacy rules decide who inherits. The result is often multiple heirs owning the home together as tenants in common. To learn more about probate basics in Maryland, see the Maryland Courts probate information: https://www.mdcourts.gov/legalhelp/estate.

2. Main ways heirs can keep the house

Heirs who wish to keep the home generally need to choose one of these practical approaches:

• Agreement and co‑ownership: Heirs agree to own the property together. They create a written co‑ownership agreement that covers who pays mortgage, taxes, insurance, repairs, and how future decisions or buyouts will work. A clear agreement reduces future conflict.
• One heir buys the others out: One or more heirs pay the other heirs fair market value for their share. That payment can come from savings, a loan, or a refinance that pulls equity out of the house.
• Refinance to remove others from the mortgage: If the mortgage is still in the decedent’s name or the heirs’ names, one heir can refinance in their own name to take the loan and pay other heirs for their interests. This typically requires qualifying for the loan on individual credit and income.
• Keep the property and pay others over time: Heirs might sign promissory notes or installment agreements so the keeping heirs pay others over time. Formal, written loan documents are strongly recommended to avoid later disputes.
• Transfer into a trust or entity: Heirs can transfer the property into a family trust, LLC, or other ownership entity with agreed rules for management, distribution, and sale. This can centralize decision making and protect relationships—but it involves setup and possible tax consequences.
• Life estate or occupancy agreement: The heirs can grant a life estate or occupancy agreement to a person who will live in the home, while others hold remainder interests or are compensated.

3. What happens if heirs can’t agree: partition actions

If co‑owners cannot reach an agreement, any co‑owner can file a partition action in the Circuit Court for the county where the property sits. A partition action asks the court to divide the property physically (partition in kind) or sell it and divide the proceeds (partition by sale). For most single‑family homes with multiple owners who want to live there, courts often order a partition by sale because dividing a single house into separate parcels usually is impractical.

Important practical points about partition:

• A partition action forces resolution even if some heirs strongly oppose selling.
• The court may award costs, attorney’s fees, and liens against proceeds, reducing each heir’s net recovery.
• Timing: partition litigation can take months or longer depending on complexity and court schedules.

Maryland courts handle partition suits through the local Circuit Court. For general civil filing information see the Maryland Courts site: https://www.mdcourts.gov/circuit.

4. Financial and tax matters to consider

• Mortgage and title: If the decedent’s mortgage remains, the lender can demand payment; heirs should notify the lender and understand options (assumption, refinance, or sale).
• Refinancing: A common way for one heir to keep the home is to refinance it in their name and pay out others.
• Capital gains and basis: Property inherited generally receives a stepped‑up basis to fair market value on the decedent’s date of death. That can reduce capital gains if heirs later sell. For complex tax questions, consult a tax advisor.
• Costs of litigation vs negotiation: Partition suits and litigation can be expensive and reduce net proceeds. Often a negotiated buyout or co‑owner agreement is cheaper and faster.

5. Practical steps heirs should take now

1. Identify title—check the deed in local land records to see how the property is held.
2. Gather key documents—will or trust documents, mortgage statements, property tax bills, homeowner’s insurance, and recent appraisal or listing information.
3. Talk to all heirs—try to reach consensus about keeping, selling, or refinancing. Keep communications documented in writing.
4. Get a value—order a professional appraisal or comparative market analysis so buyouts are based on a credible value.
5. Explore financing—if one heir wants to buy out the others, check bank loan or refinance options and prequalification.
6. Draft a written agreement—if heirs decide to keep the house together, use a written co‑ownership agreement that spells out responsibilities and exit procedures.
7. Talk to professionals—an estate attorney can explain Maryland probate consequences and a real estate attorney can prepare buyout or co‑ownership agreements. A tax advisor can explain tax effects of transferring or selling the home.

Helpful Hints

• Do not rely on verbal promises. Put buyouts and co‑ownership arrangements in writing.
• Get objective value evidence (appraisal) before negotiating buyouts—this prevents later disputes over fairness.
• If one heir wants to live in the home and cannot pay others immediately, consider a written payment plan with security (a mortgage or lien) so the paying heirs have enforceable rights.
• Keep paying property taxes, insurance, and mortgage payments to avoid tax liens or foreclosure while heirs negotiate.
• Consider mediation before litigation. A neutral mediator can often produce a workable buyout or co‑ownership plan and avoid the costs of partition litigation.
• If the home is subject to an existing mortgage, remember a lender may have the right to call the loan due on transfer or require qualification for assumption/refinance.

Where to get more information or help in Maryland

Start with Maryland Courts information on estate and civil procedures: https://www.mdcourts.gov/legalhelp/estate and the Circuit Courts page: https://www.mdcourts.gov/circuit. For local property tax and assessment questions, see the Maryland Department of Assessments and Taxation: https://dat.maryland.gov/Pages/default.aspx.

Next step: If your situation involves disagreement among heirs, consider scheduling a consultation with a Maryland probate or real estate attorney. An attorney can review title, probate requirements, mortgage obligations, and help draft buyout or co‑ownership agreements tailored to your facts.

Disclaimer

This article is for general information only and does not provide legal advice. It does not form an attorney‑client relationship. For advice about your specific circumstances, consult a Maryland attorney.