When a tenant in common dies, their ownership share does not pass to the other co-owners. It becomes part of the deceased person’s estate and transfers through their will or, if there is no will, through the state’s intestacy rules. The surviving co-owners end up with a new co-owner they did not choose, and the share almost always has to move through probate before anything is final.
That one difference drives almost everything else that follows: who the new owner is, how long it takes to get there, who pays the mortgage in the meantime, and what the surviving owners can do if they can’t live with the result.
Where the Deceased Owner’s Share Goes
If the owner left a valid will, the share goes to whoever the will names. That could be a spouse, a child, a sibling, a friend, or a charity. The surviving co-owners have no special claim unless the will specifically names them.
If the owner died without a will, state intestacy law decides. The exact order varies, but the general priority is consistent across states: surviving spouse and children first, then parents, siblings, and more distant relatives. Either way, someone new now owns that fractional interest and steps into the exact legal position the deceased held, with full rights to use, sell, mortgage, or leave their share to someone else later.
There is no survivorship shortcut here. That is the defining feature of tenancy in common and the reason the share has to be formally transferred rather than simply absorbed.
Why Probate Is Almost Always Required
Because a tenancy in common share has no survivorship mechanism and typically no named beneficiary on the deed itself, it almost always passes through probate. Probate is the court-supervised process that confirms a will, identifies the rightful heirs, settles the deceased person’s debts, and formally transfers assets.
The process begins with a petition filed in the probate court where the deceased lived. The court appoints an executor (named in the will) or an administrator (if there isn’t one). That person inventories the estate’s assets, notifies creditors, pays debts and taxes, and distributes what’s left. Creditors get a window set by state law to file claims before anything is handed out.
Straightforward estates often wrap up in six to twelve months. Contested wills, complex assets, or creditor disputes can stretch things to two years or more. Court filing fees run anywhere from roughly $50 to over $1,000 depending on jurisdiction and estate value, and attorney fees add more on top. Some states set attorney fees as a percentage of estate value; others allow hourly billing.
Small estate affidavit procedures exist in most states, but they often exclude real property or cap it at a low value. Checking the local rule is worth doing before assuming a shortcut is available, but surviving co-owners should plan for formal probate as the default.
What Surviving Co-Owners Need to Handle Right Away
Probate takes months. The property’s bills don’t wait.
The mortgage keeps running. If the deceased was on the loan, their estate is technically responsible for payments during probate, but in practice surviving co-owners often step in because they have the most to lose. Missed payments trigger late fees and eventually foreclosure against the whole property, not just the deceased’s share. Heirs who inherit the share should contact the loan servicer promptly with a death certificate and arrange to continue payments or formally assume the loan. Some states require notifying the lender within 30 days of the owner’s death.
Property taxes continue to accrue. Unpaid taxes become a lien on the entire property, which affects every owner’s interest.
Insurance needs attention too. A change in ownership status can affect the policy, so the carrier should be told what’s happening and asked to confirm coverage stays in force through probate.
A surviving co-owner who covers more than their proportional share of these costs during probate can seek reimbursement from the estate or from the eventual heir, though recovering that money is not always smooth.
The Mortgage Can Stay in Place for Heirs
Many mortgages contain a due-on-sale clause that technically allows the lender to demand full repayment when ownership changes hands. Federal law blocks lenders from enforcing that clause when the transfer happens because the borrower died. For residential properties with fewer than five units, a lender cannot accelerate the loan when the property passes to a relative on account of the borrower’s death or transfers by inheritance or operation of law.1Office of the Law Revision Counsel. 12 U.S. Code 1701j-3 – Preemption of Due-on-Sale Prohibitions
In practical terms, an heir who inherits a TIC share can generally keep the existing mortgage at its current rate and terms rather than being forced to refinance or pay off the balance. That matters a lot when interest rates have risen since the original loan was written.
Tax Consequences for the Heir
Inheriting a share of real property triggers a few tax questions, and the answers are usually better than people expect.
Federal Estate Tax
The deceased person’s entire estate, including the TIC share, is subject to federal estate tax only if the total value exceeds the basic exclusion amount. For 2026, the threshold is $15,000,000 per person.2Internal Revenue Service. Whats New – Estate and Gift Tax Married couples can effectively double that figure through portability. Most estates fall well below the line and owe no federal estate tax. Some states impose their own estate or inheritance tax at lower thresholds, so heirs in those states should check local rules.
Stepped-Up Basis
This is the real tax benefit of inheriting property. When you inherit a TIC share, your cost basis for capital gains purposes resets to the property’s fair market value on the date the owner died. If the original owner bought their 50% share for $100,000 and that share is worth $300,000 at death, your basis starts at $300,000. Sell later for $310,000 and you owe capital gains tax on $10,000, not $210,000.3Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent
The stepped-up basis only works if you can prove what the property was worth on the date of death. That means getting a professional appraisal from a licensed appraiser. Without one, you’re guessing at the single most important number in a future capital gains calculation, and the IRS can challenge an unsupported figure. For a standard residential property, appraisal fees typically run $300 to $600. Paying that upfront is cheap insurance against a much larger tax bill later.
What Creditors Can and Cannot Reach
Creditors of the deceased can file claims against the estate during probate, and the TIC share is a reachable asset. If the deceased owed significant money, creditors get paid before heirs. In extreme cases, the personal representative might have to sell the TIC share to satisfy debts.
The protection worth knowing: a deceased person’s creditors can only reach the deceased person’s share. They have no claim against the surviving co-owners’ interests. Even if a creditor forces a sale of the property to collect, the surviving owners receive their proportional share of the proceeds.
Living With a New Co-Owner, or Not
Once the share transfers through probate, the surviving co-owners and the heir have to decide what the property looks like going forward. Three options cover most situations.
- Buyout. The surviving co-owners purchase the heir’s share at fair market value. This is usually the cleanest resolution, especially when the surviving owners live in the property and the heir has no interest in co-owning.
- The heir sells to a third party. A new owner can sell their fractional share to anyone without the other co-owners’ permission. Finding a buyer for a fractional interest is harder than selling a whole property, and the price usually reflects a discount for that difficulty.
- Continued co-ownership. The heir joins the existing arrangement, and everyone shares property taxes, insurance, maintenance, and mortgage in proportion to their interests. This works when people cooperate and falls apart quickly when they don’t.
When co-owners can’t agree, any one of them can file a partition action. That’s a lawsuit asking the court to either physically divide the property (partition in kind) or sell it and split the proceeds by ownership percentage (partition by sale). Courts prefer physical division when it’s feasible, but for most residential properties it isn’t. You can’t meaningfully split a single-family house. In those cases the court orders a sale, usually at auction or on the open market, with each owner getting their proportional cut after costs. Partition litigation is expensive and slow, which is why a negotiated buyout almost always ends up cheaper than fighting.
How a TIC Owner Can Spare Heirs Any of This
If you own a TIC share and want it to transfer without putting your co-owners through probate, two tools do the job, and both require acting while you’re alive.
A transfer-on-death deed, now available in roughly 30 states and the District of Columbia, lets you name a beneficiary who receives your share automatically at death. The deed must be signed, notarized, and recorded before you die. It has no effect during your lifetime, so you keep full control, can sell or refinance, and can revoke it any time. It’s the simplest option where it exists.
Where TOD deeds aren’t available, or when you want more control over how the share is distributed, placing the TIC interest in a revocable living trust accomplishes the same thing. The trustee transfers the share according to the trust terms without court involvement. The tradeoff is higher upfront cost and the work of actually re-titling the property into the trust’s name, which many people set up and then never finish.