Inherited Real Estate: How to Avoid Disputes and Family Conflict

When a loved one passes away and leaves behind real estate, most frequently the decedent wishes to pass along the home to their loved ones or other beneficiaries. But without proper estate planning that contains clear and unambiguous direction, decisions relating to inherited property can become contentious very quickly. The loss of a loved one can have a big impact on a family dynamic, especially when legal heirs disagree on how they should manage an asset like the family home or a rental property that is left to them.

In Massachusetts, these disputes are more common than you may think. Especially as home values have greatly appreciated over the past few decades, and real estate assets typically make up a large portion of a decedent's estate. If your family is navigating a shared inheritance, here’s what you need to know.

What Types of Real Estate Transfers Occur Automatically Upon Death?

Before discussing common scenarios that play out when legal heirs (if the decedent died without a Will) or named beneficiaries (if they decedent died with a Will and or/Trust) disagree on what to do with a property, it is important to understand what type of real estate transfers occur automatically. There are a number of ways in which real estate transfers can be automatic upon death.

1. When Title is Held as Joint Tenants or Tenants by the Entirety

When the decedent holds title to a property with someone else as a joint tenant or as a tenant by the entirety (a form of joint tenancy available only to married couples), title to the property will transfer automatically to the other person upon their death. Joint tenancy and tenancy by the entirety come with rights of survivorship, which is a major advantage to holding title in either of these manners. For a full overview of the different ways to hold title in Massachusetts, please read our legal blog here. This is most commonly seen where married couples hold title as tenants by the entirety. When one spouse dies, the other now owns the home outright. They don’t have to take any legal action to secure their now 100% interest in the property. Joint tenancy and tenancy by the entirety must be formed in compliance with the “four unities of title.” The four unities are: unity of possession, unity of interest, unity of time, and unity of title. This essentially means that all joint tenants have equal rights of possession and use of the property, they have equal interests (50/50 for two people), and they acquire the property at the same time and through the same instrument (frequently through a Massachusetts Quitclaim deed).

2. Real Estate Held in a Revocable or Irrevocable Trust

When the decedent has established a Revocable or Irrevocable Trust during their lifetime and funded the trust with real estate, the terms of the Trust will outline how the real estate will be held, sold, or otherwise distributed. This is a huge advantage of incorporating a Trust into your estate plan, as it allows you to provide clear instructions for how any Trust assets are to be handled, managed, or potentially sold and distributed. Another advantage to utilizing a Trust is that it allows your estate to bypass the probate process, saving your beneficiaries significant time, court costs, and legal fees. Lastly, a Trust ensures that your affairs remain completely private, compared to filing probate which is a public process, where documents tied to your estate become public record and are available for anyone to view.

Based on the type of real estate being held in Trust, the instructions from the Settlor will differ. If the property has historically been an investment property, the Trust will outline whether the property should continue to be rented, what to do with future lease agreements, or if the property should ultimately be sold (and when). If the property held in Trust was the decedent’s home and is now vacant, the Trust will likely outline that the Trustee can sell the property immediately, and distribute the net proceeds to the named beneficiaries. In the Trust, the Settlor will name their beneficiaries, and explicitly outline the percentage that each beneficiary will receive from the proceeds of the sale and any other trust property.

Incorporating Option Contracts into a Trust

While oftentimes the Settlor of the Trust will outline that upon their death, the Trustee can sell the property and distribute the net proceeds in accordance with the terms of the Trust, this is not always the case. There are some situations where the Settlor may not desire for the property to be immediately sold to the highest bidder. If one beneficiary, such as a child, still lives in the home or has a special attachment to the real estate, it is not uncommon for the Settlor to grant certain people what is known as a “Right of First Refusal" (ROFR) or “Right of First Offer” (ROFO). These are two types of option contracts that differ slightly in how they operate.

• A ROFR is an option contract that gives the holder the opportunity to match any offer the seller receives before it can be accepted. If the holder matches the offer, the seller must sell the property to the holder of the ROFR option over the other potential buyer. This type of option is more advantageous to the holder, because they don’t have to make the first offer, but instead can either exercise their option to match any alternative offer, or refuse to match any other offer before the property can ultimately be sold. The Settlor may also wish to incorporate a slight discount into the ROFR, knowing that a family member or close friend will be the potential purchaser. For example, the Settlor may grant a child a ROFR at a 15% discount from the appraisal price or the price of the best offer if the property gets listed.
• This differs from a ROFO, option where the holder has the right to make the first offer on the property before the seller has the ability to negotiate with other potential buyers. A seller must first approach the holder of the ROFO option to give them the first opportunity to make an offer. The holder can decline, however, to make any offer at all. If they decline, the seller can then openly list and market the property to the public. Similarly, if the seller believes the offer is not competitive, they can reject it and move on to other potential buyers. This type of option favors the sellers, because it essentially guarantees the first offer, which in turn can set a baseline price for future negotiations. When it comes to trust and estate planning, ROFR’s are much more common.

Allowing “Life Tenants” to Remain at a Property

The last scenario occurs when the decedent has a friend or family member living with them at their property, that is not an owner of record on the deed. This could be someone the decedent was caring for that is elderly or  perhaps has a medical condition that doesn’t allow them to live on their own. It could also just be a friend or family member that is a roommate of the decedent and has nowhere else to go, or they can’t afford their own housing. In these scenarios, the Settlor can build into their Trust the ability for the other tenant to remain at the property as what is known as a “life tenant.” This is a legal term that operates exactly as it sounds. It grants a specific individual the right to live at the property for the remainder of their natural life. While the life tenant remains at the property, they will be solely responsible for paying the bills and any ordinary carrying expenses (such as the mortgage, taxes, insurance, repairs, etc.) along with any general maintenance that may be required. Once the life tenant passes away, or they vacate the home before they die, the Trust will include instructions as to how the property should then be managed or sold. This is a thoughtful option for anyone that owns their home, lives with a friend or family member that is not on the title of the home, and wants to ensure that they can’t be kicked out of the house in the event of the owner’s death.

What Happens When Property is Not Held in Joint Tenancy or in a Trust?

The process for transferring real estate if the decedent died without holding title in joint tenancy or incorporating a Trust is very different. Without a surviving joint tenant or a Trust, the real estate will pass through Massachusetts Probate if the decedent owned the property in their individual name. This will require a probate proceeding to be filed with the probate and family court in the county where the decedent was domiciled. Filing probate differs based on whether the decedent died with a Will (referred to as Testate) or without a Will (referred to as Intestate). To learn more about the entire Massachusetts Probate process, click here to read our full legal blog.

If the decedent died Testate, the named Personal Representative’s ability to sell or convey real estate will be entirely dependent on whether such a power was granted in the Will itself. If the Will granted the power to sell real estate, then the Personal Representative can sign off on the transfer or sale of any property, and disburse any proceeds in accordance with the terms of the Will. This allows the Personal Representative to do all of the following actions in their capacity as Personal Representative once they are officially appointed by the court and issued Letters of Authority:

• Hire a broker and list the property as for sale;
• Sign off and approve the selected Offer to Purchase;
• Sign the Purchase and Sale Agreement;
• Sign the Deed that officially transfers title to the buyer;
• And finally, disburse any proceeds of the sale to the beneficiaries named in the Will

If the power to sell real estate was not granted in the Will, or if the decedent tied Intestate without a Will, then what is known as a “Petition to Sell” must be filed with the court. This petition is a formal request to the probate court for a license to sell the real estate that was owned by the decedent. In order to file the petition and obtain a license to sell, you must already have an offer from someone to purchase the real estate. You must also evidence that any Massachusetts estate tax due from the decedent’s estate has already been paid through a closing letter or discharge from the IRS, or you must provide an affidavit from the Personal Representative stating that no estate tax is due (meaning the total estate was valued under the $2 million dollar Massachusetts estate tax exemption as of 2025). Filing a petition to sell and gaining court approval adds significant time to the probate process. This is why utilizing an experienced estate planning attorney to help you avoid the probate process can save you and your loved one’s significant time and money.

What Happens When Legal Heirs or Beneficiaries Disagree?

While utilizing one of the above methods is the most efficient way to ensure that your property is transferred to your intended beneficiaries automatically, it does not guarantee that potential disputes won’t arise. The best way to combat potential conflicts is to work with a trusted and experienced estate planning attorney, such as the award-winning attorneys at Lane, Lane, & Kelly. An experienced attorney will utilize very clear language to ensure that your wishes will be adequately carried out, minimizing the potential for any arguments between siblings or beneficiaries down the road. They can also guide you in naming the right fiduciaries to serve as Personal Representative or Trustee, to ensure that the people with decision-making power are trustworthy and capable of carrying out their fiduciary duties objectively, and not emotionally.

No matter how ironclad an estate plan is, when real estate is involved, there are bound to be some disputes. Whether the decedent died with a Trust in place, or they died with no Will whatsoever, any beneficiary or legal heir that thinks they are entitled to inherit something may take issue with certain decisions being made on behalf of the estate. Some of the most common disagreements that arise when it comes to disposing of newly inherited property occur when:

• One heir/beneficiary wants to sell the property immediately, while another wants to keep the property, rent it, or continue to live in it.
• Legal heirs/beneficiaries disagree on the value of the property, where one person may wish to accept a certain offer while others want to reject it and seek a higher bid.
• One heir/beneficiary has been living in the property for a very discounted rate or sometimes without paying any rent at all, and the others now want adequate compensation.
• Someone that is not an heir/beneficiary was living with the decedent, and now refuses to vacate the property or compensate the estate.
• The named Personal Representative in the Will or the Trustee may be serving alone, and the other beneficiaries (often the other siblings) want a say in the decision-making process.

These situations often lead to frustration, miscommunication, and in some instances, court proceedings and intervention. If you are navigating any of these issues and need legal guidance, please reach out to our office to schedule a free consultation.

Legal Consequences of Unresolved Disputes

There are legal drafting mechanisms that can aid in handling these types of situations before they ever come into existence. In these instances, the decedent must be forthcoming with their estate planning attorney as to their family dynamic, their living situation, and their testamentary disposition as to how they want their estate handled. While it is a very sensitive topic and difficult to think about, estate planning at its core is planning for the worst possible scenarios, no matter how unlikely or improbable you may think they are to occur.

While you hope that these situations never arise, your estate plan must include terms that protect yourself, your estate, your fiduciaries, and your intended beneficiaries in the event that any of these unforeseen situations do in fact occur. This is especially true when it comes to the unpredictability of how your death may impact your friends and family. Without a clear plan in place, some unintended consequences that could arise include:

• Fallout between loved ones and strained family relationships. Family conflict resulting from a friend or family member dying without an estate plan in place can cause irreparable harm to friendships and a family dynamic.
• Significant probate delays and increased costs, especially if the decedent died without a Will. As discussed above, when family members and fiduciaries can’t agree on decisions regarding real estate, the probate process will be dragged out and potentially require court oversight and intervention before anything can be formally approved.
• When disagreement arise over some heirs/beneficiaries wishing to sell a property and others just wanting their share of money, a Petition to Partition can be brought requesting a court to force the sale of a property. For a full overview of a Petition for Partition Action, you can read our legal blog here.

How We Can Help You Navigate Inherited Property Disputes

The best way to avoid these types of conflicts and disputes is to get out ahead of them by creating an estate plan with the trusted and experienced attorneys at Lane, Lane & Kelly, LLP. By addressing potential conflict in your estate plan, families can avoid court intervention and maintain harmony long after a loved one’s passing.

At Lane, Lane & Kelly, we regularly help families in Massachusetts resolve disputes over inherited property, whether during the estate planning stage or during the probate process. We work to minimize legal risk, protect your financial interests, and guide you through complex family dynamics relying on our years of estate planning and probate administration experience.

If you want to avoid any of these potential conflicts to safely protect your loved ones after you are gone, contact our office today. Voted the Best Law Firm on the South Shore of Massachusetts, our team knows what it takes to properly plan ahead, and save you and your loved one’s years of stress and unnecessary headaches in the process. Click the link below to get started today with your completely free, no obligation consultation with our estate planning team!

This blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this blog you understand that there is no attorney client relationship between you and Lane, Lane & Kelly, LLP.