Heir property

Wills, trusts and estates
Part of the common law series
Wills
Legal history of wills Joint wills and mutual wills Will contract Codicil Holographic will Oral will Sections Attestation clause Residuary clause Incorporation by reference Contest Testamentary capacity Undue influence Insane delusion Fraud No-contest clause Property disposition Lapse and anti-lapse Ademption Abatement Satisfaction of legacies Acts of independent significance Elective share Pretermitted heir
Trusts
Express Resulting Constructive Common types Bare Discretionary Accumulation and maintenance Interest in possession Charitable Purpose Incentive Other types Protective Spendthrift Life insurance Remainder Life interest Reversionary interest Testamentary Honorary Asset-protection Special needs Supplemental needs Governing doctrines Pour-over will Cy-près doctrine Hague Convention (conflict law) Application in civil law Dishonest assistance
Estate administration
Intestacy Testator Probate Power of appointment Simultaneous death Slayer rule Laughing heir Advancement Disclaimer of interest Inheritance tax
Related topics
Advance directive (Living will) Blind trust Forced heirship Totten trust
Other common law areas
Contract Tort Property Criminal law Evidence
v t e

Heirs property, or heirs' property, refers to property that is passed between generations of family members without a will or formal estate strategy.^[1] Heir property is commonly viewed as an unstable form of ownership, since co-owners often have limited rights over the property.^[2]

Description[edit]

Heirs' property is created when the original owner of the home or land dies either without a will or with a basic will that divides their property equally among their descendants.^[3] The recorded deed for the real property is typically in the name of the deceased relative. The transfer of ownership to the deceased's heirs is typically recorded during the probate process, but if this is not handled properly it can result in a lack of legal documentation of the next generation of owners, since they informally inherited the property. Many of these owners may not be aware that they are fractional owners.^[4]

Heirs' property owners are considered tenants in common. Each fractional owner has equal rights to use and possession of the entire estate, and is equally responsible for taxes and other real property-related expenses. Each heir may transfer their own fractional interest in real property to another heir or outsider, but all must agree to any major decisions about the real property.^[3] In this system, the land is held in common. After several generations, it can be difficult to determine who the legal owners are, and the legal owners might not have paid their share of taxes, lived on the land, or helped maintain it.^[5]

Each heir can file a partition action, requesting to sell their fractional portion of the undivided whole. This occurs either in kind or by sale. Partition in kind is when a judge physically divides up the land, carving out a portion that corresponds with the size of the share of the one who wants out. Then that owner, now the sole owner of a smaller plot, can use or sell it as they wish. In a partition by sale, the entire plot of land is sold, and the proceeds are split and given to all of the owners, according to their percentage of ownership.^[6]

Heirs living on family property may have unspoken agreements with the deceased for them to continue living there, but without an estate plan they do not necessarily have greater legal rights than any other heirs. Heirs cannot sell, mortgage or lease their property without the agreement of all heirs. Changing the legal designation of the property to something other than heirs' property also requires the agreement of all heirs. Locating and contacting all heirs to do so may be difficult, especially if some of them live outside of the country or have not been in contact in years.^[7]

Individuals living on heirs property are at an elevated risk of forced sale and eviction, and may be unable to fully benefit from ownership of the land. Heirs have more difficulty farming, qualifying for agriculture loans, and selling agriculture products. Heirs cannot qualify for most rehab programs or secure financing for needed repairs for their heirs property. Heirs may not be able to participate in government programs offered by USDA, HUD, FEMA, and other federal and state agencies. Heirs cannot qualify for loan modifications and other loss mitigation programs when facing foreclosure. Heirs may not be able to qualify for conservation use tax reductions, homestead exemptions or other real property tax exemptions.^[8]

History[edit]

Beginning in the 1950's state courts began overriding the stated preference for partition in kind, instead favoring partition by sale. Although more convenient for courts, this had the effect of allowing one fractional owner, often a distant family member without a connection to the land, to force a sale against the wishes of all other owners. This has led to a loss of land ownership, a key way to build familial wealth, especially impacting poor communities and communities of color.^[6]

Uniform Partition of Heirs Property Act[edit]

In 2010, the Uniform Law Commission drafted a model Uniform Partition of Heirs Property Act. As of 2023, it has been enacted in twenty-two states and introduced in five more.^[9] Among other things, it requires improved procedures for serving notice on heirs and determining fair market value if the co-owners of the property are unable to agree.^[10] The UPHPA restructures partition sales with three major reforms:^[11]

1. If a co-owner brings a partition action in court, the court must provide an opportunity for the other co-owners to buy out the co-owner who brought the action.
2. If there is no buyout, then the law provides a preference for the court to order a partition in kind and divide the property, rather than order a sale.
3. If a partition in kind is not ordered, the UPHPA requires the court to sell the property at a market sale, not at an auction sale, and specifies a process for the property to be appraised and sold for its fair market value.^[12]

2018 Farm Bill[edit]

The 2018 Farm Bill, a piece of omnibus legislation that governs much of agricultural policy in the United States, required the USDA's Farm Service Agency to develop rules allowing heirs' property owners to obtain a farm and tract number, even with cloudy property title.^[13]

Federal Emergency Management Agency[edit]

In October 2022, FEMA developed guidelines for its agents to accept heirs' property documentation to qualify for disaster relief.^[14]

Impact of heir property on African American communities[edit]

Historically, African Americans have more commonly let land become heirs’ property, due to a combination of factors, including a lack of access to government services and a distrust of the legal system brought on by systemic discrimination.^[15] The legal costs involved in preparing an estate plan may also deter some families from creating one.^[7] According to the United States Department of Agriculture, since 1910, the heir property system has been responsible for African American landowners losing 80% of the farming land owned by previous generations.^[5][16] In 1910, 16 million acres were operated by African American farmers, or 14% of farms. In 2023, under 3 million acres are operated African American farmers and 1.5% of farms.^[17]

However, the prevalence of heir property in some communities may also reflect a personal preference for informal, communal management of land. In African-American communities in the South, conflicts resulting from disagreements between heirs may arise common when one or more heirs do not live on the property. For individuals who still live on the property and collectively abide by informal rules of property management, heir property may have fewer risks.^[18]

Within the Southern United States, about a third of the land owned by African Americans, amounting to about 3.5 million acres, is held in the heirs property system.^[15] Arkansas, Mississippi, Alabama, Georgia, South Carolina, Texas, North Carolina, Virginia, Florida, and Louisiana are the states most affected by the confusion of heirs' property.^[5]

In Georgia, a 2017 study by the USDA and the Carl Vinson Institute of Government determined that 11-25% of parcels in every Georgia county are probable heirs property. The total tax-appraised value of probable heirs property in Georgia is more than $34 billion. The negative impacts of heirs property affect families and every aspect of community including the functioning of local government, court systems, state departments, banks, businesses, and nonprofits.^[19]

References[edit]

External links[edit]

• Heirs' Property and Land Fractionation: Fostering Stable Ownership to Prevent Land Loss and Abandonment -Publication from the U.S. Department of Agriculture, Forest Service.
• Heirs' Property - National Agricultural Law Information Partnership, U.S. Department of Agriculture National Agricultural Library