Inheriting Property with Siblings in Washington State: Legal, Tax, and Selling Tips

When a parent passes away and leaves real estate to their children, it can bring up all kinds of questions — emotional, financial, and legal. If you’re inheriting a home with your siblings in Washington State, this article is for you.

As a Seattle-based Realtor with experience helping families sell inherited homes, I’ve seen the good, the bad, and the very complicated when it comes to siblings co-owning real estate after a parent dies. My goal is to help you understand your options and make informed decisions — with family harmony intact whenever possible.

This guide covers key issues for heirs and siblings, including:

• Estate planning strategies for parents before death
• What to do after the home is inherited
• Tax considerations (like the step-up in basis)
• How to handle disagreements between heirs
• What to know if the home is vacant

1. Estate Planning Tip: Adding Siblings to the Title During Parents’ Lifetime

Some families explore the option of adding children (like siblings) to the property title before the parents pass away. The theory is that by transferring a partial ownership interest before death, the estate may reduce its total value — since owning a portion of a property is worth less than controlling the whole thing.

This may help reduce estate tax exposure in larger estates. However, there are serious tax considerations:

• Adding children to the title during life is considered a gift, and may be subject to gift tax rules.
• This strategy can complicate future sales, especially if family members disagree.
• It may eliminate the possibility of receiving a full step-up in basis (explained below).

⚠️ This is a strategy that should only be used under the guidance of an estate attorney and tax advisor. It can be effective for high-value estates, but risky if not done properly.

2. Selling Inherited Property: Sibling Decision-Making Dynamics

Once a parent has passed, their home may become part of the estate — and the heirs (typically the children) will need to decide what to do with it. If the home is in probate, decisions must be made by the executor or personal representative, but in most cases, families discuss and try to reach agreement together.

In my experience helping families across Washington State, these are the most common selling strategies:

• 💸 Sell quickly “as-is” to an investor or for cash — easier, faster, but typically below market value.
• 🔧 Fix up and update the home — requires investment and project management, but may yield a much higher sales price.
• 📦 Clear out and sell “as-is” for top dollar — minimal investment, but priced to reflect current condition.

If all the siblings agree, the process can move fairly smoothly. But when there’s disagreement — especially over whether or not to invest in updates or who gets to choose the agent — you may need to involve a probate attorney.

For example, in a recent sale, I was one of three Realtors interviewed by a probate attorney representing an estate. The siblings could not agree on who to hire, so the attorney made the final call. He also restricted the estate from making any major renovations. The home had not been updated in over 20 years, but it was listed and sold in its current condition.

Tip: If your parents haven’t passed yet and are doing their estate planning, encourage them to name a trusted executor and outline a plan for what should happen with the home.

3. Step-Up in Basis: A Key Tax Benefit for Heirs

If your parents keep the home in their name until they pass away, the property usually receives what’s called a step-up in basis. This is a major benefit when you go to sell the home later.

Here’s what it means:

• The home’s value is “reset” to its fair market value at the time of death.
• Any gain from that date forward is what’s taxable — not the gain from when the parent bought it.
• Often, this means little or no capital gains tax if you sell the home shortly after inheriting it.

Example: If your parents bought the home in 1980 for $90,000 and it’s worth $700,000 when they pass away, the new tax basis becomes $700,000. If the estate sells it for that amount soon after, there’s typically no capital gain to tax.

This is one reason why families may avoid transferring title before death — doing so can eliminate this helpful tax treatment. Always consult a tax professional before making any decisions.

4. Protecting the Vacant Home from Damage

If you’ve inherited a home and it’s sitting empty, there are some risks to be aware of — especially in Washington’s rainy, cold winters.

A few years ago, we had a major power outage during a cold snap. I was touring homes during that time and saw multiple listings where ceilings and floors were damaged due to frozen and burst pipes. Once the power went out, the homes got cold, pipes froze, and water caused thousands in damage.

To prevent this, make sure to:

• Leave the heat on — even if the house is vacant
• Install a smart thermostat or temperature alert system
• Have someone check on the property regularly during bad weather
• Winterize the home if it will sit empty for an extended time

Insurance Tip: Some homeowners policies may not cover damage to vacant homes if they’re left unchecked for more than 30 days. Contact the insurance company to make sure the policy is valid while the home is empty.

Need Help Selling an Inherited Home With Siblings?

Whether you’re just starting to talk with your siblings about what to do, or you’re in the middle of trying to sell a property, I’m here to help. As a Seattle-based Realtor with experience in probate and estate sales, I can provide:

• Accurate home value estimates
• Cash offer options
• Market-ready listing services
• Referrals to attorneys, contractors, and clean-out teams

👉 Click here to read our full guide to Selling a Home in Probate in Washington State

Let’s make the process smoother for your family — and make sure you’re getting the best outcome, both financially and emotionally.