Ken Garten: Estate planning can save a partition action later
Under Missouri law, one of several co-owners of real estate can file a civil lawsuit and ask the court to order that it be partitioned and divided among the owners in proportion to their interests.
This is called a partition action and can be done in one of two basic manners.
If the court determines the property can be divided in kind – that is split into pieces, as with undeveloped acreage – then it may appoint three commissioners who are authorized to employ a surveyor for the task, and the real estate is divided up like a pizza pie among the owners.
If the property is not subject to a reasonable division in kind – as with a house on a residential lot – then the court may order the property sold by the sheriff and the proceeds divided among the owners, after expenses, in proportion to their interests.
This tends to come up in a situation where multiple siblings inherit through a beneficiary deed their parents’ home.
Oftentimes, the siblings are in agreement to have the home sold by a realtor or otherwise, or one of the siblings and the others agree to a buyout of the others’ interests, and do so cooperatively.
However, as we all know, cooperation is not a universal trait.
And I have seen situations where one of several siblings who receive a share of title to the house decide they want to move it, which, as a co-owner, they have an absolute right to do, and cannot be barred from the property by their co-owners.
Of course, if this happens, any of the other co-owner siblings can barge into the house too as a co-owner and roommate of sorts, and they can’t be excluded either.
But a common scenario is that all but one of the co-owners want to sell the house, get their money and get on with their lives. And then there’s that one co-owner who decides to move in and refuses to participate in a sale of the property, thwarting the co-owners' ability to do so.
This is where a partition action may come in handy, so that one of the co-owners can file suit to force a sale by the sheriff, under court order, and have the proceeds divided.
As one might imagine, a sale by the sheriff on the courthouse steps under court order is not exactly the best way to maximize value in the sale of real estate, as compared to having a real estate agent list it and market it in the traditional way.
But it may be the only way to get it done if there is one owner who refuses to sell his or her interest.
And while a partition action is less than an ideal way to go, instituting or threatening such an action can often lead to a change of heart among all co-owners to sell cooperatively, to maximize the proceeds to everybody.
When doing estate planning, we always talk about non-probate transfers and beneficiary deeds to avoid probate by automatically titling property upon death into the names of beneficiaries.
So long as all of the beneficiaries are like-minded, stable in their situations, and will be able to cooperate and agree on how to handle the co-ownership of the real estate, it is the most efficient way to transfer title to beneficiaries upon death.
But if one of those beneficiaries may be personally or financially unstable, generally obstreperous, or unable to get along with his co-beneficiary owners, then sometimes it may be better to let a residential property be liquidated by the personal representative of an estate in probate, who is in complete control of what happens regardless of cooperation or the lack thereof, and the proceeds divided in that fashion.
As with most matters in the law, every situation is different, and needs to be evaluated with due care.
Ken Garten is a Blue Springs attorney. Email him at email@example.com.