Inheriting a house in Michigan can feel like an unexpected gift—or an overwhelming property puzzle, depending on how the property was titled, whether there is a will, and whether other heirs are involved. As a Michigan real estate professional with more than 35 years of practice, I regularly hear from heirs who assumed the process would be simple, only to discover that deed language, court requirements, co-ownership disputes, and tax rules have created serious complications.
This guide walks through the most common and consequential issues when inheriting a house in Michigan—from understanding what your deed actually says to navigating estate administration, resolving disputes among co-heirs, and ultimately selling or transferring the property with a clear title. We will also address a real scenario from a reader named Marlene from Shelby Township.
Whether you are just beginning to deal with a loved one’s estate or have already run into roadblocks, understanding these fundamentals will help you protect your rights and make informed decisions.
A Common Dilemma: When a Deed and a Will Conflict
Marlene’s situation illustrates one of the most misunderstood areas of real estate management:
“I want to sell a home that I inherited from my mother. I owned the home together with my mother before she passed. I know this because we created the deed together about a year before she passed. My sister says that my mother left the home to both
Marlene’s situation is highly common, and the answer hinges entirely on the exact language used in the deed. A properly drafted deed can supersede the instructions left in a will. However, the key phrase is “properly drafted.” The conveyance language in the deed determines everything.
Why Deed Language Controls Property Transfers
Real property is governed by the deed that conveys it, not by what a will says, unless the deed is ambiguous or legally defective. This is because a deed is an immediate conveyance of a property interest. Once recorded, it transfers rights right away. A will, by contrast, only takes effect upon death and only transfers assets that the deceased still owned at the time of their passing.
When Marlene’s mother executed a deed naming the two of them as co-owners—especially after drafting her will—she effectively removed her interest in the property from the reach of that will. The deed, if properly executed and recorded, becomes the controlling document.
The Three Types of Co-Ownership
State law recognizes three principal forms of concurrent property ownership, each carrying dramatically different consequences when one owner dies:
Joint Tenancy with Right of Survivorship
The surviving owner automatically inherits the full property at death. No court process is required, as the asset passes cleanly by operation of law.
Tenants in Common
The deceased owner’s share passes directly to their personal estate. This arrangement requires formal estate administration to transfer the property interest through a will or state succession rules.
Tenancy by the Entireties
This represents a specialized survivorship category reserved exclusively for married couples. Ownership transfers automatically to the surviving spouse at death without court intervention.
The Default Presumption: Tenants in Common
State property standards presume a tenancy in common when real estate is deeded to two or more unmarried people, unless the deed specifically states that the co-owners hold title as joint tenants with full rights of survivorship.
This default rule is critically important. If Marlene’s deed simply named her and her mother as co-owners without explicit “joint tenancy” or “survivorship” language, the law treats them as tenants in common. Under a tenancy in common, each owner holds a separate, divisible interest.
When the mother passed, her half-interest moved according to her will, which split everything between both daughters. As a result, Marlene’s sister would hold a legitimate legal claim.
However, if the deed explicitly states that Marlene and her mother held title as joint tenants with full rights of survivorship, Marlene became the sole owner of the entire property the exact moment her mother passed. The will cannot recapture a property interest that was already conveyed away by a valid deed.
When Court-Supervised Estate Administration Is Required
Court-supervised estate administration is the process that validates a will, appoints a personal representative, settles estate debts, and authorizes the distribution of assets to the rightful heirs.
Title to a deceased person’s real property generally passes at the moment of death to the named heirs. However, the personal representative must secure a formal court appointment before they can execute a deed conveying clear, marketable title to a third-party buyer.
Triggers for Estate Administration
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The deceased owned real property solely in their name, with no co-owner holding survivorship rights.
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The property was held as tenants in common, and the deceased’s fractional share needs to be formally transferred.
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The will and deed conflict, requiring court clarification to establish true ownership boundaries.
When Administration Can Be Avoided
You can typically avoid this court track if the property was held in a joint tenancy with right of survivorship and a co-owner is still living, if the property was held in an active revocable living trust, or if the property passed to a surviving spouse through a tenancy in the entireties.
Most straightforward estate cases involving real estate settle within six to twelve months. More complex or contested cases—especially those involving will challenges, multiple disagreeing heirs, or hidden title defects—can take considerably longer. During this administration window, the property generally cannot be sold without formal authorization. For practical guidance on navigating these requirements, review our
Inheriting a House with Siblings: Managing Co-Heir Disputes
One of the most challenging aspects of inheriting real estate arises when multiple siblings or heirs inherit a property together as co-owners. If the heirs hold title as tenants in common, each individual owns an undivided fractional interest. Crucially, major decisions, such as selling the property or executing a new lease, require unanimous agreement from all co-owners.
When co-heirs hit a complete deadlock on what to do with a property, any co-owner can file a partition action in the county circuit court. Under state law, individuals holding lands as joint tenants or tenants in common can ask a judge to partition the asset.
A court can physically divide the land if practicable or order a forced sale at auction and divide the financial proceeds among the heirs.
The Uniform Partition of Heirs’ Property Act
A recent legislative update, the Uniform Partition of Heirs Property Act, protects families from losing generational wealth through forced auction sales at below-market values. Under this framework, when one heir in a co-ownership structure insists on selling, the remaining family members secure an improved, structured opportunity to buy out the selling heir’s share at fair market value before a forced public sale can proceed. You can review the state’s exact structural definitions and procedural protections by checking the official
Tax Realities of Inheriting a House
A common question among heirs involves whether they owe steep taxes upon receiving a home. The financial outcome depends entirely on the specific category of tax involved.
State Inheritance and Estate Taxes
Michigan does not impose a state inheritance tax on heirs for modern estates. The state estate tax was also effectively eliminated following federal tax code restructures. For the vast majority of local families, no state-level tax becomes due simply from inheriting a home.
Federal Estate Tax Limits
The federal estate tax only applies to exceptionally large estates that exceed generous statutory exemption thresholds. Most families inheriting a standard residential property will fall well below these limits, meaning they escape federal estate tax exposure entirely.
Capital Gains Tax and the “Step-Up in Basis” Rule
For heirs who plan to sell the inherited property, capital gains tax represents a crucial financial consideration. Fortunately, federal tax law provides a significant benefit called a “step-up in basis,” which resets the tax value of the home automatically:
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The Old Basis vs. New Basis: Instead of using the price your parents originally paid for the house decades ago, your new tax cost basis is adjusted to the property’s actual fair market value on the exact date of the parent’s death.
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Minimal Tax Exposure on Quick Sales: If the home originally cost $50,000 in 1980 but is valued at $250,000 when your parent passes away, your new tax basis becomes $250,000. Selling the property shortly after for $250,000 leaves you with a taxable capital gain of zero.
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Future Appreciation Exposure: If you decide to keep the home rather than sell it immediately, you will only owe standard capital gains taxes on any growth in property value that occurs after the date you inherited it.
Additionally, the state imposes standard transfer taxes when the inherited property is later sold to a retail buyer, which applies to the real estate conveyance transaction rather than the inheritance itself.
Managing Mortgages, Liens, and Disclosures
Inheriting a house does not automatically mean inheriting a free and clear financial asset. The property frequently carries historical obligations that must be resolved before you can close a sale.
Outstanding Mortgage Notes
If the deceased held an open mortgage on the property, that financial obligation remains attached to the home. Federal banking rules generally allow heirs to assume the existing mortgage payments without triggering a due-on-sale acceleration clause. Alternatively, you can refinance the loan in your own name or sell the property to pay off the outstanding balance at the closing table.
Hidden Property Liens
Tax liens, past judgment claims from creditors, and unreleased contractor liens travel with the land. These clouds must be formally satisfied or litigated before clear title can be conveyed to a new buyer. Ordering a comprehensive title search early avoids last-minute transaction collapses. Review our strategies at our
Statutory Disclosure Duties
Even when inheriting and subsequently selling a home you have never lived in, you must comply with state disclosure mandates. Sellers must complete a written disclosure statement detailing all known material defects. Failing to report a known mechanical failure or structural cloud exposes you to post-closing liability. Review our guide at our
Checklist: Common Mistakes to Avoid
Avoid these five major administrative errors to protect your inherited property rights:
- Assuming the Will Controls Everything: A validly executed deed overrides the instructions in a will. Always audit the actual recorded deed language first.
- Drafting Real Estate Deeds Independently: Using boilerplate online templates to create “DIY” deeds frequently results in a default tenancy in common, triggering unintended co-heir gridlock. Review our comparison at our
Quitclaim Deeds vs. Warranty Deeds Guide - Delaying Document Recording: Michigan operates as a race-notice state, meaning an unrecorded deed can be defeated by an outside claimant who records a conflicting interest first. File your records promptly at the county counter.
- Attempting to Sell Without Clear Title: Listing an inherited property before finishing estate administration or clearing outstanding liens will stall your transaction and expose you to breach of contract claims. Review our
Deed Errors Resource - Ignoring Co-Heir Ownership Fractions: You cannot unilaterally execute a listing agreement or sell a property if you share a tenancy in common with other siblings. Doing so invites immediate litigation.
Intestate Succession: When No Will Exists
If a property owner passes away without a valid will—a scenario known as dying intestate—the real estate is distributed according to strict state intestate succession tracks.
The property generally passes first to a surviving spouse, then to children, parents, and more distant relatives. The exact share each individual receives depends entirely on the surviving family matrix.
Furthermore, to inherit under state law, an heir must survive the deceased by at least 120 hours. This survivorship period prevents an asset from moving through two rapid probate tracks back-to-back if multiple family members perish in a single accident.
Dying intestate creates severe logistical friction for unmarried partners, stepchildren, and anyone the deceased intended to protect but who lacks a recognized legal relationship under state succession rules. Executing an intentional estate plan is the only way to guarantee your land passes to the people you choose. Review our consumer protection guidelines at our
To see how these estate timelines match your broader real estate goals, look through our specialized resources on
Frequently Asked Questions
Do I have to open a probate case to sell an inherited house? It depends entirely on how the deed was written. If the deceased held the title solely in their name or as a tenant in common, you must go through formal estate administration to clear title before a sale. If the property features an active joint tenancy with right of survivorship, the court track can be skipped.
Which document wins if a deed and a will say different things? A properly executed and recorded deed generally takes precedence over a will. A deed represents an immediate transfer of a property interest while the parties are alive, meaning the home is no longer part of the owner’s personal estate when the will takes effect at death.
Can my siblings force me to sell an inherited family home? Yes. Any co-owner holding an interest as a tenant in common can file a partition lawsuit to force a sale of the land at auction. However, the Uniform Partition of Heirs Property Act gives remaining family members an explicit right to buy out the selling sibling’s share at a fair market valuation first.
Are there inheritance or estate taxes due when a parent passes away? No, there is no state-level inheritance or estate tax due simply from inheriting a residential home. However, if you hold the property for a long period and it appreciates further, you will owe federal capital gains tax on the financial growth that occurs after the date of passing.
What is the default type of co-ownership if the deed doesn’t list survivorship rights? The law automatically presumes a tenancy in common. This means each owner holds a separate, divisible interest that does not automatically pass to the survivor at death but instead moves into their personal estate for administration.
Can I sell an inherited home if it still carries an active mortgage? Yes. You can assume the existing mortgage payments or sell the property to a new buyer, using the closing proceeds to satisfy the remaining loan balance in full. Ensure the estate administration process is sufficiently advanced so the personal representative holds the authority to sign the final deed.
Soble Law helps clients identify where real estate and business deals break down, define the legal risk, and take control of the next step.
Call: 888-789-1715
Website: www.provenresource.com
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About David Soble: David is a seasoned real estate and finance attorney with more than 35 years of experience, combining his background as a “big bank insider” with a commitment to demystifying complex legal issues for his clients. As the founding attorney of Soble Law (Soble PLC), he leads a specialized team in Michigan and Ohio that handles real estate transactions, contract disputes, probate, and financial litigation. Known for a practical, no-nonsense approach and peer-rated excellence (Martindale-Hubbell AV Preeminent), Soble and his team strive to protect clients’ property and financial interests with clarity, integrity, and experience.
Disclaimer: The information in this article is for general educational purposes only and does not constitute formal legal, financial, tax, real estate, finance, probate, or any other professional service or advice. Reading this content or contacting us does not establish an attorney-client relationship. Every situation is unique, and laws change frequently, so you should always consult with your own qualified attorney or professional advisor before making any decisions.
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