How is estate land divided?
Many people are interested in knowing how intestate real estate will be divided among multiple heirs and, more particularly, how a house will be divided.
To begin, the term “real estate” includes the value of the underlying land, as well as everything that is permanently attached to the land, such as a house. The term “property” is not limited to land, but instead refers to everything that can be owned.
Also, although certain states have laws that direct the distribution of real estate independently of all other property, these laws are generally restricted to a defined class of relations and are further limited to a specific dollar value (or, although uncommon, to a specific physical quantity).
If the qualified intestate heirs do not fall within one of these classes of relation or if the value of the intestate real estate is greater than the amount granted by law, there will be intestate real estate that must be distributed. Consideration of these laws will not be useful in answering the main concern of this topic.
Finally, the division of real estate is governed by the intestate laws of the state where it is physically located. The intestate personal property of a person who lives in California is distributed according to California’s intestate laws, while intestate real estate located in New York and owned by the same person will be divided according to New York’s laws of intestacy.
Basis of Division
All forms of intestate property are divided among the heirs upon the basis of the fair market value, which is represented by a cash value. The quantity of any particular form of property does not affect how it is distributed or divided. In most states, the fair market value of all the deceased’s intestate property is added to together to form the intestate estate. It is this value that is divided among the heirs.
A minority of states, just nine, have laws that may require intestate real estate to be divided separately from the remainder of the intestate estate. However, considering real estate separately from the remainder of the estate does not change the method of division. The fair market value of all intestate real estate is added together and then divided. (To see these states, open the Interactive Summary of Laws and choose the “Community Property and Real Estate” option from the main menu.)
Because the intestate estate is divided upon the basis of it cash value, the process of division is the same whether the intestate property is ten bottles of wine, ten acres of real estate, ten cars, or all of these combined.
Suppose an unmarried parent dies with four children and forty acres of real estate. Many people incorrectly expect that the forty acres will be divided equally by giving each child ownership of ten physical acres of land.