Sadly, it happens far too often—70% of families experience conflicts over their parent’s property.

 

But why does this happen?

 

Many families face four problems...

Without a trust, your loved ones will likely face probate—a costly, time-consuming, stressful, and public process.

 

While a trust protects your family from probate, most trusts simply state: "Properties will be equally shared among beneficiaries."

 

But how do you equally split real estate? That’s where conflict begins.

It's natural to assume your children will cooperate, but ask yourself: 

- Do your kids think alike? 
- Do they act alike? 
- Are they in the same financial stage of life?

When your children have to share real estate, you're putting them in business with each other, to manage the largest amount of wealth they’ve ever handled.

 

How’s that going to work?

Everyone wants the best outcome—but only one person can have the best. If one child feels they received less than their fair share, resentment builds, and disputes are almost inevitable.

Real Estate can’t be split like cash - it must be sold to divide

 

But what if: 
- One wants to sell the property, while another wants to keep it.
- One wants to sell now, while another prefers to wait for a better time.
- One wants to renovate before selling, while another wants to sell "as-is."
- One feels entitled to more for being the caregiver, while another believes everything should be split equally.
- One believes they deserve the house for living there long-term, while another sees it should be divided equally.
- One wants to manage the sale themselves, while another prefers to hire a professional.
- One feels the distribution is unfair, while another believes it’s fair and reasonable.
- One values sentimental attachment, while another prioritizes financial needs.

This is why 70% of families fight over real estate 

The passing of a parent is an emotional and vulnerable time.

Grief can cloud judgment, and unresolved sibling hurts and offenses can resurface.

Small decisions can become major battlegrounds when emotions take over.

 

Add in-laws and emotional attachments, and disputes can escalate quickly.

If so, ask yourself...  

 

1) After you’re gone, who gets what? Is it clear? Is it fair?

2) What is the timeline for the distribution of wealth?

 

Without clear answers to these questions, your family may face unnecessary conflict and confusion.
 
 

 

One of the best ways to prevent family disputes is to plan your children’s inheritance while you're still alive. This can be done by selling your property and letting your children choose the property they want to inherit.

 

If their share isn’t enough to buy their dream home, they can get a mortgage to cover the difference. Many of our clients’ children have good jobs and steady incomes, but they struggle with a down payment. This plan has helped parents and grandparents support their family’s future, making homeownership possible and setting up long-term wealth.

 

With a 1031 exchange, you can delay paying capital gains taxes when you sell. Then, when you pass away and the properties go to your chosen heirs, those capital gains taxes are eliminated through a step-up in cost basis.

 

Example: 

Let’s say you own an investment property worth $900,000. Instead of leaving it for your children to figure out after you’re gone, you decide to sell the property now and split the money equally among your three children. Each child gets $300,000 from the sale.

They can use their share to buy their own home or use it as a down payment on a property of their choice.
If $300,000 isn’t enough to buy the home they want, they can get a mortgage to cover the rest.

This approach allows each child to choose a property that fits their needs—whether it’s in a different city, a bigger house for their family, or an investment property.

Benefits of This Approach:
✅ No Capital Gains Taxes: By using a 1031 exchange, you defer and then eliminate capital gains taxes.
✅ Children Build Wealth: Each child can invest in their own property and start building equity and gaining appreciation.
✅ Financial Independence: A mortgage helps them gain financial independence and tax benefits.
✅ Flexibility: Each child gets to choose a home that fits their needs and lifestyle.
✅ Peace of Mind for You: You get to see your children benefit from their inheritance while you’re still here.
✅ No Fights Over Property: Since each child chooses their own home, there’s nothing left to argue about.

1) Set a Timeline to Sell the Property

Your children will have 12-24 months to sell the property and divide the proceeds equally. This timeline creates urgency while allowing enough time to make thoughtful decisions.

If all parties mutually agree, they can extend this timeline by one additional year to allow more time for a resolution.

2) Offer a Buyout Option During the Timeline

If one child wants to keep the property, they can buy out the others during this timeframe.

To ensure fairness, two appraisals will be used:
- One by the child buying the property.
- One by the children selling their shares.

The final price will be based on the average of the two appraisals.

Benefits:

✅ Clear Timeline: Ensures the property doesn’t sit in limbo for years.
✅ Extension Option: Provides flexibility with an extra year if everyone agrees.
✅ Fair Buyout Option: Prevents conflict by using neutral appraisals.
✅ Structured Process: Keeps everyone accountable with clear steps.
✅ Flexibility: Allows time for discussion without dragging on indefinitely.