In Pittsburgh’s ever-changing neighborhoods, from Lawrenceville to Squirrel Hill, many long-time residents find themselves in a complex situation: jointly owning family properties with their siblings. These homes, often passed down from parents, have seen decades of Pittsburgh’s evolution – from steel town struggles to tech-driven revitalization.
But what happens when tragedy strikes, and one sibling dies unexpectedly? The surviving owner is suddenly thrust into a maze of legal questions, potential family conflicts, and financial uncertainties. With Pittsburgh’s real estate market heating up, the stakes can be high.
Read on to find out what happens when two siblings own a property and one dies?
Ownership Type
When a property is co-owned with a sibling, determining the type of ownership is crucial in understanding how the property will be handled after their death.
If the property was held as joint tenancy with right of survivorship, ownership automatically transfers to the surviving sibling upon the other’s death. So, the property will skip probate.
This means that the surviving sibling gains full ownership of the property immediately, with no need for court intervention. Joint tenancy with right of survivorship is common for family homes or shared properties when co-owners want to ensure any transfer of ownership goes smoothly. The surviving sibling can then decide whether to sell, keep, or rent the property based on personal preferences and financial considerations.
On the other hand, if the property was held as tenancy in common, each sibling owns a distinct share of the property, and upon death, their share becomes part of their estate. This ownership type requires that the deceased sibling’s share go through the probate process before being distributed to heirs. If the deceased sibling left a will, their share would be distributed according to its terms.
If there’s no will, Pennsylvania’s intestacy laws will determine who inherits their share, which could involve multiple heirs, such as other siblings or children. This often makes managing the property more complex, as the new co-owners may have different intentions for the property.
Estate Taxes and Debts
Property inheritance law Pennsylvania imposes a tax. For property left to siblings, the tax rate is typically 12%. This means that the value of your deceased sibling’s share of the property will be subject to this tax before ownership can be fully transferred or settled. It’s important to understand that this tax applies even if you held the property as joint tenancy with right of survivorship, though it avoids the probate process.
In addition to inheritance tax, the estate is responsible for settling any outstanding debts your sibling may have had. This includes:
- Mortgages
- Liens
- Property taxes
- Any other financial obligations
If your sibling’s estate lacks sufficient liquid assets to pay off these debts, the property itself may need to be sold or mortgaged to cover any remaining costs. In the case of co-ownership, you may need to decide whether to contribute financially to help settle these debts, especially if you wish to retain the property.
Updating the Deed
If the property was co-owned as joint tenancy with right of survivorship, updating the deed is relatively straightforward. The surviving sibling will need to file an Affidavit of Survivorship with the Allegheny County Recorder of Deeds. This document serves as proof that the other co-owner has passed away, allowing the surviving sibling to take full ownership. Along with the affidavit, a certified copy of the deceased sibling’s death certificate is required. Once filed, the deed will be updated to reflect the surviving sibling as the sole owner, bypassing probate.
For properties held as Tenancy in Common, the process is more complex, as the deceased sibling’s share must go through probate before the deed can be updated. After the probate process concludes, the executor of the estate will transfer the deceased sibling’s share to their heirs according to the will or Pennsylvania’s intestacy laws if no will exists.
At this point, the new owners (whether the surviving sibling or additional heirs) must file a new deed that reflects the updated ownership structure. This typically requires submitting the new deed and any relevant probate documents to the recorder of deeds, along with applicable fees.
Joint Ownership After Death: Assess the Property’s Condition
Whether you plan to sell, rent, or keep the property, understanding its current state will help you make good investment decisions and avoid any extra costs down the road.
Begin with an in-depth inspection of your co-owned property. If you haven’t visited the property in some time, there may be wear and tear or necessary repairs that went unnoticed. It’s often a good idea to bring in a local home inspector to look at the overall condition, including:
- The roof
- Foundation
- Plumbing
- Electrical systems
- HVAC
If the property has been vacant or is in disrepair, you may need to invest in repairs or renovations to make it marketable. Depending on the extent of the work required, this could range from cosmetic updates like painting and landscaping to more significant fixes like replacing the roof or upgrading appliances.
Assessing the property’s condition is also essential if you plan to rent it out. Tenants expect a safe and well-maintained home, and local Pittsburgh regulations may require you to make certain updates to meet safety standards.
Renting Out the Property
Renting out your property lets you generate income while retaining ownership, but it requires careful planning and coordination, especially if the property is shared with other siblings.
Managing tenants, keeping up with Pittsburgh property maintenance, and dealing with vacancies can be time-consuming and stressful. In many cases, it’s better to cut your losses and sell the property.
Selling The Property
In a lot of ownership cases, it’s a lot easier just to sell after a co-owned property death Pittsburgh.
Before selling your house, ensure that all legal matters related to ownership have been resolved. If the property was co-owned and you have now become the sole owner, you’ll need to update the deed to reflect this change. Filing the necessary paperwork with the Allegheny County Recorder of Deeds will legally transfer ownership to your name, allowing you to sell the property without complications.
Consider the timing of your sale. Pittsburgh’s real estate market, like any city, can be influenced by seasonal trends, with spring and summer often being the best times to sell. Working with a Pittsburgh real estate agent who understands market dynamics can help you list the property at the optimal time for a quicker sale and higher offers.
Prepare your Pennsylvania property for sale by getting rid of clutter, cleaning, and staging it to make it more attractive to buyers. Depending on the condition of the property, you may also need to invest in curb appeal improvements or minor repairs that can enhance the property’s marketability without requiring major renovations.
Selling the property will also involve some financial considerations. You’ll need to account for closing costs, realtor fees, and any capital gains taxes that may apply if the property has significantly appreciated in value. It’s wise to sit down with your tax professional to understand how selling the property will impact your tax obligations.
Make sure you ask plenty of questions before you commit to selling, to ensure you’re not being tricked at a vulnerable time.
Dealing with Sentimental Value
Whether the property was a shared home, a place of family gatherings, or simply a reminder of your sibling, the emotional ties can complicate practical decisions like selling or renting.
The first step in dealing with sentimental value is giving yourself time to process the loss and the emotions connected to the property. It’s normal to feel a sense of attachment, but it’s also important to balance these emotions with practical considerations about what’s best for you moving forward. You may find it helpful to involve other family members in the decision-making process, especially if they also have emotional ties to the property.
Before making any decisions, you might want to remove items or mementos that hold personal significance. Taking family photos, keepsakes, or even small items that remind you of your sibling can help preserve the emotional connection without the need to keep the entire property. This can make it easier to move forward with selling or renting while still honoring the memories tied to the home.
If the property is particularly meaningful, consider organizing a family gathering or celebration of life event at the home before making any final decisions. This can provide closure and allow you to reflect on the good memories shared with your sibling, helping you say goodbye to the physical space while keeping those memories intact.
Bring in the Experts
Don’t be afraid to bring in some extra help to manage joint ownership after death.
The best real estate agents can help you determine the best course of action for the property. If you’re considering selling, an experienced agent familiar with the Pittsburgh market can perform a comprehensive property valuation, helping you set a competitive asking price.
They will also guide you through the selling process, from marketing the property to negotiating offers and finalizing the sale. Their knowledge of Pennsylvania market trends ensures that you list the property at the right time, attracting serious buyers and potentially securing a higher selling price. You might even find a company that will buy your house as is, without you having to do anything at all!
Legal Counsel For Joint Ownership After Death
You’ll want legal support, too. An attorney can guide you through the legal process, ensuring that all necessary paperwork is filed correctly and that ownership transfers are completed without issues.
They can also help you understand Pennsylvania’s inheritance laws, any tax implications, and how to handle debts tied to the estate. If disputes arise with other heirs or family members, an estate attorney can act as a mediator, helping to resolve conflicts.
Prepare in Advance
If you and your sibling (or siblings) are all still alive, it’s important to get a plan in place in advance.
Make sure you communicate about your estate planning siblings. Have an open conversation with your sibling about their wishes for the property. Discuss whether they intend for you to keep, sell, or rent the property, and make sure these intentions are clearly stated in their estate plan or will. Having these conversations in advance can provide peace of mind for both of you and ensure that everyone is on the same page regarding the future of the property.
Your sibling should work with an estate attorney to outline exactly how their share of the property should be handled. This plan should include clear instructions on the property’s future, how debts and taxes should be covered, and any preferences for whether the property should be kept, rented, or sold. It’s also helpful for both parties to consult a financial expert to understand the tax implications of inheriting property, particularly Pennsylvania’s inheritance tax, and how to plan for these expenses.
You should have the same plan in place for yourself. Even if neither of you is in poor health, that doesn’t mean accidents can’t happen. It will give your loved one peace of mind to know you have a plan if the worse does happen.
Preparing in advance also involves ensuring that the property is well-maintained. Keeping up with regular real estate maintenance and important repairs ensures that if the time comes to sell or rent your Pennsylvania property, it will be in good condition and easier to market. This can also prevent financial strain if significant repairs or upgrades are needed in the future.
What Happens When Two Siblings Own a Property and One Dies? Now You Know
What happens when two siblings own a property and one dies? It can be complicated. Hopefully, with this guide, this awful time in your life can be managed a lot easier.
Do you want to sell your house fast? Pittsburgh Cash Home Buyers is the highest-rated locally-owned and operated investing firm in the area, so we can get you the money you need in no time.
Contact us today to get started.