Property Partitions Lawyers In Florida
Partitions Are The New Probate: How To Resolve Your Inheritance Real Estate Fights
People sometimes believe their estate planning will be easy. They may think the only asset they own is their house, and they just want to leave it to their children. But even this seemingly simple plan can become complicated.
Let's say you, your brother, and your sister inherited your mother's house after she passed away. In order to be fair, your mother left each of you an equal share in the house. You and your siblings are now co-owners of the house (most likely as tenants-in-common), so what are you going to do with the house?
Maybe you agree to sell it and split the profit among yourselves. But maybe it's more likely you can't come to an agreement. Maybe you want to sell it immediately. Maybe your brother has a sentimental attachment to the home and wants to wait to sell. Maybe your sister actually lives in the home and wants to own it outright. What then? You and your siblings will most likely have to seek partition of the property.
Partition is a legal cause of action in which the court determines the rights and interests of co-owners and divides the property. There are two types of partition: partition in kind and partition by sale. Partition in kind is an actual, physical division of the property. Partition by sale (as may be obvious by the name) means a court-ordered sale of the whole property. So, in our example, because you and your siblings are all co-owners of the property and cannot agree on what to do with it, partition is the best course of action.
Florida recently passed a new law related to partition: the Uniform Partition of Heirs Property Act ("UPHPA"). This new law provides more protection for heirs seeking partition. Previously, one heir could unilaterally seek partition of the property or sell their interest to an investor, thus disrupting ownership and removing the property from family control. This might not sound like such an issue if the only heirs are you and your two siblings, but what if the heirs were you and your 30 cousins? The UPHPA introduces new procedures for notice and value determination. The UPHPA also adds a buyout option and open-market sale if partition by sale is ordered.
Heirs Property
If you and your siblings are seeking partition under UPHPA, the first step for the court is to determine whether the property is "heirs property." The UPHPA lists a more detailed definition, but "heirs property" basically means property owned by relatives as cotenants. So, in our example, your mother's home will be considered "heirs property" because you and your siblings are relatives and own the home together as cotenants.
Notice Requirements
The UPHPA requires notice to all parties (you and your siblings) at multiple stages in the partition process. The law was designed to protect heirs, so the multiple notice requirements at different stages keep everyone on the same page and avoid anyone being blindsided. There's the general notice you'll receive when someone files a complaint, there's notice to all parties of the value of the property, and finally, there's notice if any party wishes to buy out the others' interests.
Determination Of Value
Determining how much the property is worth is an important, but potentially contentious, part of the partition process. How do you determine the worth? What if you don't agree with the valuation? The UPHPA provides some guidance:
First, the court must determine the fair market value of the property. This can be accomplished by appraisal or evidentiary hearing.
If the appraisal method is chosen, the appraisal will be conducted by an impartial real estate agent, licensed to determine fair market value.
Once the appraisal is made, you can object within 30 days.
Ultimately, no matter which method, the court will conduct a hearing to determine fair market value, and the court will consider the appraisal and other evidence.
Alternatively, if all cotenants agree to a value or to a method of valuation, then the court will use the agreed value or agreed method.
Through these steps, it's clear how the UPHPA removes the potential contention in value determination. If all parties agree, then there's no issue. If there's some dispute, then a neutral professional appraises the property. And even then, there are other checks and balances like objections, the court as the final decision maker, and the introduction of other evidence.
Buyout Option
The UPHPA also provides an option for someone like the sister in our example who wants to own the house outright. Under the UPHPA, the sister has the opportunity to buy the interests of the cotenants (you and your brother) who request partition by sale.
If the sister wants to pursue this option, she will have to pay the value of the entire parcel times the percentage of ownership of you and your brother. If for example, the entire property was worth $100,000, and you and your siblings had equal shares (33.33% each), then your sister would have to pay almost $67,000 to buy out your and your brother's interests in the property ($100,000 x 66.67%).
Open-Market Sale
If the court orders the property to be sold, then the UPHPA states the sale must be an open-market sale as opposed to a private sale or auction, unless the private sale or auction would be economically better for the parties. This provision is an attempt to ensure heirs are not shortchanged in selling the property. Generally, an open-market sale invites higher bids. Additionally, under this provision, either the heirs or the court pick an unbiased, licensed real estate broker to handle the sale of the property. Similar to value determination, these procedures also prevent the sale from becoming contentious.
The UPHPA is designed to protect heirs, but there are also strategies you can employ to help your heirs before they have to rely on the UPHPA. Schedule a meeting with our estate planning attorneys, and we can discuss all of your options.
The Estate Plan
135 San Lorenzo Ave Suite #750
Coral Gables, FL 33146
(305) 677-8489
https://www.TheEstatePlanFL.com/
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