Dear Moneyologist,
In 2008 my mother was ill, and close to her last days. My brothers and sisters (five boys and four girls) at the time thought it in the best interest to deed the family home to me as I was most financially able to provide and take care of the home that one of my sisters, one brother and I shared with our mother. My mother passed later that year and my sister, brother and I continued to live in the home.
In 2014 we suffered a tragic fire in our home which also killed my sister and her great-grandson. I would like to rebuild the house with the money from the insurance policy, however, my other brothers and sisters who haven’t lived in the home nor shared any of the expenses since leaving many years ago, feel they are entitled to a share of the insurance settlement and also want me to sell the property.
To them it is all about the money. I have been told and also believe that since the house was deeded to me — which makes me the sole owner — that they no longer have a claim to anything involving the house and if I decide to use the settlement to rebuild, I have every right to do so and do not have to “share” anything with any of the brothers and sisters who lived outside of our home.
J. in Philadelphia
Dear J.,
I’m sorry to hear about your family’s tragedy. It sounds like the house was deeded to you because you lived there and were taking care of your mother. From a legal perspective, the only possible way you could be forced to sell the property is if your siblings were able to prove you had undue influence over your mother. “This is a danger,” says Shirley B. Whitenack, a partner with Schenck, Price, Smith & King in Florham Park, N.J. But assuming that decision was both legal and binding, you own the house.
However, you need to check the insurance policy, too. Even though the house is in your name, the insurance policy may still be in your mother’s name. That means the insurance money could go to the heirs of your mother’s estate rather than the person whose name is on the deed of the house, says Mary O’Reilly, a partner at Meltzer Lippe law firm in Mineola, N.Y., and former chair of the American Bar Association on non-tax issues and trusts and estates.
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Another possibility: The insurance company may find a reason not to pay the claim if you didn’t inform the company that there was a change of ownership of the house. “They may say, ‘You can’t change ownership without notifying us,’” O’Reilly says. “You need to be very careful whenever you change the titles of anything that’s insured. You don’t want to give the insurance company an ‘out.’ I’ve had experiences with this and we had to fight to get those proceeds.”
Read: My father excluded my siblings from his will
On a personal note, it sounds like you want to rebuild the house and live in it again with your family. That’s a courageous and honorable thing to do. This was the scene of a terrible fire, but it was also the place you all grew up and, I’m sure, holds many happy memories for you, too. If it is the case that you are not legally obliged to split up the home among your siblings, it makes no logical sense to give pieces of it away, especially since some of you need to live in it.
There is also a broader point here worth noting: You are particularly vulnerable now, so it’s not the best time to decide whether to sell the house. Whether you are going through a divorce, serious illnesses or family tragedy such as this, you should avoid making any hasty or irrevocable decisions. In this case, that either means rebuilding the house, restoring the status quo, returning to your previous living arrangements and providing a home for those who lived in the house before, or deciding to make no decision right away.
Whatever you do, please don’t navigate this alone. Being the one shouldering the rebuilding of your family home is a tremendous responsibility. You need a team to help. You will need a lawyer to examine the deeds of the house and insurance policy, and ensure it was done in a proper manner; this will give you peace of mind and also help prepare in the event your siblings take legal action. A financial advisor and accountant will also help you navigate the tax and insurance implications and the process of rebuilding your home — and your life.
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