Texas: How Heirs Can Keep the Family Home Instead of Selling

Disclaimer

This article is informational only and is not legal advice. Laws change and every situation is different. Consult a qualified Texas attorney for advice tailored to your facts.

Detailed answer — how heirs can keep a house in Texas

When a decedent leaves a home to two or more heirs, the property usually becomes co-owned (commonly as tenants in common) unless the will or deed says otherwise. In Texas, any co-owner can ask the court to partition the property — that often means the court orders a sale and divides the proceeds. The relevant statute that governs partition actions is Texas Property Code, Chapter 23 (Partition of Real Property):
Texas Property Code, Chapter 23.

But a forced sale is not the only outcome. Heirs who want to keep the house have several practical and legal options to avoid a court-ordered sale. Below are common approaches, how they work in Texas, and key legal points to watch.

1) Agreement among heirs (preferred path)

If all heirs agree, they can sign a written agreement that sets out who will keep the house and how the other owners will be compensated. Typical agreement forms:

• Buyout: One or more heirs pay the fair market value to the others based on an appraisal.
• Co-ownership plan: Heirs remain co-owners but sign a management agreement describing who pays expenses, who lives in the house, and how future sale or buyouts are handled.
• Sale to a third party with net-proceeds distribution according to shares (if that is the agreed solution).

Put any agreement in writing, record it if it affects title, and consider using a neutral appraiser and escrow to handle funds and the deed transfer.

2) One heir refinances or buys out the others

An heir who wants the home can refinance existing mortgage debt in their own name and use cash or a lender’s proceeds to pay other heirs their share. Issues to consider:

• If the mortgage is in the decedent’s name but not yet paid, the lender’s approval may be required to remove the property from the estate loan.
• Heirs paid off should sign a deed transferring the co-owners’ interests to the buying heir and release any claims.
• Document the transaction carefully to avoid later disputes.

3) Partition in kind (physical division) — rarely practical for a single-family home

Texas courts can order partition in kind (physically dividing land) when it is practical. For most single-family residences on one lot, physical division is not workable. In that case, the court may order a sale instead. See Texas Property Code, Chapter 23.

4) Buyout financed by a loan secured by the house or private financing

If a buying heir cannot pay cash, they can seek a mortgage or private loan using the home as collateral. Lenders will evaluate credit, income, and property value. Agreeing heirs should document the payoff and record any deed transfers promptly.

5) Use trust or LLC ownership to manage interests

Transferring the property into a trust or family LLC can set rules for occupancy, management costs, and eventual sale or buyout. This is most useful when heirs intend long-term joint ownership or want to formalize contributions and distributions. Set up these entities with an attorney.

6) Mediation and settlement to avoid litigation

If heirs disagree, courts often require or encourage mediation. Mediation can yield a buyout, life‑estate arrangement (one heir retains occupancy for life), or other settlement. Mediation is usually faster and less expensive than litigation.

7) If an heir files a partition suit

Any co-owner can file for partition under Texas law. The court will consider whether a partition in kind is feasible; if not, the court orders a sale and divides the proceeds. To avoid an unwanted sale after suit starts, negotiate immediately and consider seeking a temporary injunction in limited circumstances with an attorney’s help. See Texas Property Code, Chapter 23.

Important Texas-specific points

• Probate and title: If the decedent’s estate is in probate, the executor or administrator has duties to manage estate assets. A prompt title search and reviewing the will (if any) matter. Probate procedures can affect timing and who has authority to transfer the home.
• Homestead rights: Texas protects homestead rights for a surviving spouse and minor children; those rights can limit a sale or creditors forcing a sale. Consult a probate or real estate attorney to determine homestead status.
• Tenancy type: How the title was held before death (joint tenancy with right of survivorship vs. tenants in common) changes how the property passes. If the deed had right of survivorship, the property may not pass through probate.
• Costs and taxes: Buying out co-owners can trigger closing costs, mortgage qualification requirements, and future capital gains tax implications when the home is eventually sold.

Helpful hints — practical steps to keep the family home

1. Confirm ownership: Get a certified copy of the deed and run a title search to see how the property is held.
2. Get an appraisal: A neutral appraisal gives a reliable current market value for buyouts or equitable divisions.
3. Talk early and document agreements: Put any buyout or co-ownership terms in writing and sign a written settlement or deed transfer.
4. Consider mediation: Use a mediator experienced in probate/real estate disputes to reach a settlement before court.
5. Check for homestead protections: If a surviving spouse or minor children live in the house, homestead law may block certain forced sales — consult counsel.
6. Consult a Texas probate or real estate attorney: They can explain probate timing, court risks, and prepare deeds, buyout agreements, or a trust/LLC plan.
7. Plan financing early: If a buyout is likely, talk to lenders about refinancing options and qualification requirements.
8. Record everything: After any transfer, record the deed with the county to protect title records.

When to get legal help

Talk to a Texas attorney if:

• One heir wants to force partition or you received notice of a partition suit.
• There are disputes about the will, homestead, or heirs’ shares.
• You need to structure a buyout, refinance, or transfer into a trust/LLC.

A lawyer can prepare settlement documents, represent you in mediation or court, and advise on tax and probate consequences.