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

Short answer: Yes — but only if the heirs agree on a workable plan. Vermont law allows heirs who inherit real property to keep it through agreements, buyouts, trusts, or continued co-ownership. If heirs cannot agree, a court can force a partition and sale. The best results come from a written plan and early communication.

Detailed answer — how this works in Vermont

When a homeowner dies, the property usually passes to heirs through probate or by operation of title (for example, joint tenancy with right of survivorship). In many intestate (no will) cases, Vermont’s probate procedures determine which individuals are heirs and how the estate is administered. If several heirs receive ownership interests, they commonly hold the property as co-owners (tenants in common).

Co-ownership creates shared rights and shared responsibilities. Each co-owner has a legal right to possess the whole property, but they also share expenses (mortgage, taxes, insurance, repairs) and must agree to major decisions. If co-owners disagree about keeping or selling the house, Vermont law lets a co-owner ask a court to partition the property — often resulting in a sale if the court finds division in kind impractical.

Practical ways heirs can keep the house instead of selling:

1. Agree to co-own long-term with a written co-ownership agreement. Put expectations in writing: who pays which bills, how repairs are handled, how rental income is shared, how one owner can exit, and how a buyout price is set. A written agreement reduces conflict and makes obligations clear.
2. One or more heirs buy out the others. Heirs can hire an appraiser to set fair market value. The buyer(s) can refinance the mortgage in their name(s), obtain funds to pay siblings or other heirs, and record a deed transferring full title. Without refinancing, a quitclaim or bargain-and-sale deed can transfer ownership, but outstanding mortgages remain unless paid or refinanced.
3. Create a trust or use estate planning tools. Transferring the property to a revocable or irrevocable trust can centralize management and spell out long-term plans for the house. A trust can also address tax planning, creditor protection, and future sale or rental rules.
4. Agree to rent the property. If heirs live elsewhere, they can rent the house and use rental income to pay expenses. A written property-management plan or hiring a property manager helps prevent disputes.
5. Grant a life estate or use deed-based arrangements. Heirs can craft life estates or other deed instruments so one person has the right to live in the house for life while others hold remainder interests. These arrangements affect tax, Medicaid eligibility, and future sale options, so get legal and tax advice before signing.
6. Use mediation before litigation. Vermont courts and private mediators can help co-owners negotiate a practical solution at far less cost and stress than a partition lawsuit.

What happens if heirs cannot agree?

If co-owners cannot reach agreement, any co-owner may file a partition action in Vermont’s Civil Division (Superior Court). The court may order a physical division (partition in kind) if practical, or order a sale and divide the sale proceeds among owners according to their ownership shares. Courts typically prefer partition in kind only when the land can be divided without undue harm; for a single-family home, courts commonly order sale and division of proceeds.

Because courts can force a sale, co-owners who want to keep the house should act quickly to negotiate and document an alternative plan.

How probate and an executor/administrator affect the process

If the decedent’s estate goes through probate, the executor or administrator has the authority (subject to the will and court approval) to manage and sell estate property. If the will gives the executor power to sell, the executor may sell the house during probate. If heirs inherit by intestacy, the probate court will appoint a personal representative who must follow statutory duties. To understand how probate affects ownership and the authority to keep the property, consult the Vermont Probate Division resources: Vermont Judiciary — Probate Division.

Key legal resources and statutes

• Vermont Judiciary — Probate Division: https://www.vermontjudiciary.org/court/probate
• Vermont Judiciary — Civil Division (where partition actions are filed): https://www.vermontjudiciary.org/court/civil
• Vermont statutes and searchable laws (search for “partition”, “intestate”, or “probate”): https://legislature.vermont.gov/statutes/

Common steps heirs should follow to keep the house

1. Identify ownership and probate status. Confirm whether title passed automatically (joint tenancy) or via probate (intestate or by will).
2. Obtain a current appraisal and a title report. Know the fair market value and any liens or mortgages.
3. Talk with all heirs openly. Try to reach consensus about usage, contributions, and exit rights.
4. Put agreements in writing. A solid co-ownership agreement or buyout contract minimizes future disputes.
5. Consider refinancing to remove other heirs from mortgage obligations if a buyout occurs.
6. Consult an attorney experienced in Vermont probate and real estate to draft agreements, handle transfers, and, if needed, represent you in mediation or court.

Practical examples (hypothetical)

Example 1 — Buyout: Three siblings inherit a Vermont house valued at $300,000. Two siblings agree to let the third buy them out. They hire an appraiser, the buyer refinances the mortgage for the full amount, pays $100,000 to each sibling, and records a new deed.

Example 2 — Co-ownership with rental: Two heirs live out of state. They decide to rent the house, hire a property manager, and share net rental income proportional to ownership shares. They document responsibilities and a buy-sell process if one wants to leave later.

Risks and costs to consider

• Court partition costs: If one heir files for partition, expect attorney fees and court costs, and a possible forced sale.
• Tax consequences: A sale or transfer can trigger federal and state tax issues (capital gains, basis adjustments). Consult a tax advisor.
• Mortgage and creditor risks: Outstanding mortgages stay with the property until paid or refinanced. Transferring title does not remove debts unless the lender agrees.

Helpful Hints

• Start the conversation early. The sooner heirs discuss options, the easier it is to avoid court.
• Get a neutral appraisal to avoid disagreement about value.
• Use a written co-ownership agreement that covers payments, repairs, use, rental rules, dispute resolution, and buyout formulas.
• Consider mediation before filing a partition action. Mediation is cheaper and preserves family relationships.
• Talk to a Vermont probate or real estate attorney before signing deeds or life-estate documents; some solutions have unexpected tax or benefit consequences.
• Keep clear financial records (receipts for repairs, tax bills, insured amounts) if you choose to co-own or rent the property.

Next steps: Gather the deed, any will or probate papers, recent mortgage statements, and an appraisal if available. Schedule a meeting with all heirs and, if needed, consult a Vermont probate or real estate attorney to draft a written plan.

Disclaimer: This article explains general Vermont procedures and common options but does not provide legal advice. It does not create an attorney-client relationship. For advice that applies to your specific situation, consult a licensed Vermont attorney who handles probate and real estate matters.