Resolve 'heirs property' before it's too late

AUBURN, Ala., Dec. 20, 2024 /PRNewswire/ -- Land-grant institutions in Alabama are working to provide information and support to families dealing with "heirs property" through programming at Alabama Cooperative Extension System offices throughout the state.

Ryan Thomson, an assistant professor in agricultural economics and rural sociology at Auburn University, and Adam Rabinowitz, an Extension agricultural economist and associate professor in agricultural economics and rural sociology at Auburn, are part of the Alabama Heirs Property Alliance (AHPA), a group of professionals from land-grant institutions who are available to assist families with this complex issue.

Imagine owning a piece of land that's been in your family for generations, but no one really knows who is in charge or how to get a clear understanding of who owns the land or who is allowed to use it. Some might call it "family land," "Granny's place" or even "kinfolk property." While these terms sound friendly, they hide a bigger problem. This type of land, known as "heirs property," can cause serious trouble for families if they don't take steps to clear up ownership.

In this article, Thomson and Rabinowitz explain heirs property and how the AHPA can help.

Heirs property is real property (land and a house) that gets passed down from someone who died without a will, a will that is not properly processed in court or a will that simply leaves the property to "all my children." Instead of one person owning the property, all of the family members (heirs) share it together.

This is known legally as "tenancy in common" or "undivided interest property." It means each family member owns a stake in the whole property, but no one owns any specific piece. In some places, this is called a "clouded" or "tangled" title. It may sound fair, but it often leads to a lot of headaches and heartache down the road.

The first challenge is that banks will not loan or approve a mortgage on the property. This forces all property expenses, like roof repairs, renovations and upkeep costs, to come directly out of pocket. As a result, many heirs properties fall into disrepair and rapidly lose the value of the buildings. Since the property lacks a clear title, the family's intergenerational wealth is effectively trapped in legal limbo.

When ownership is unclear, decisions about the property also become difficult. For example, one person wants to build a house on the land, but if any other co-heir disagrees, then the house cannot be built. Maybe someone else needs money and wants to sell the property, but not everyone agrees, so the sale cannot go forward.

This type of shared ownership leaves families stuck and unable to use, sell or develop the land. As time goes on, the number of co-heirs generally increases, making consensus even more difficult.

This is where the real problems arise. Sometimes, just one family member can force the entire property to be sold, even if the others don't want that. This is called a partition sale, and historically, the land gets sold for far less than it's worth. Predatory heir hunters often target distant family members, buy their shares and force the sale of the property right out from under the family. Then the property is lost forever.

Another common source of loss occurs when the family forgets to pay the taxes, and the property goes up for a tax sale. In the end, this land meant for the family can be sold, and descendants may lose the intergenerational wealth that was meant for them.

Unresolved heirs property can also prevent access to helpful government programs. Whether it's farming assistance, disaster relief or home improvement grants, families need a clear title or specific proof of ownership to qualify for these benefits. Thankfully, FEMA updated its proof of occupancy policies in 2022 to decrease displacement following a disaster. Without proper documentation, families struggle to improve the land, sell crops or recover from damage after natural disasters.

Families bear the brunt of the issues that arise from unresolved heirs property. Disputes and disagreements can sever relationships, creating long-lasting bitterness that makes moving forward more difficult. What should be a source of pride and family legacy becomes a legal mess that causes stress and division.

How can families protect their land and avoid these problems? In theory, it's simple.

Take steps to resolve heirs property before it's too late. Families should map the family tree and work together to find a solution that is appropriate for them. This may be clearing the title, which means legally deciding who owns what part of the property and in what form. Or it might be developing a tenant-in-common agreement legally outlining a set of rights and responsibilities that each family member will follow. This often involves a historical title search by a lawyer, which then informs the creation of a family estate plan. These methods can help protect the land from being lost, ensure future generations benefit from it and make it easier to sustain.

In practice, this process isn't easy, but the Alabama Heirs Property Alliance (AHPA) is available to help. This is a group of professionals from land-grant institutions that provides information and support to families dealing with heirs property through programming at county Extension offices throughout Alabama.

The AHPA was founded as a collaboration between Alabama A&M, Auburn and Tuskegee Universities and is supported by the Alabama Cooperative Extension System with funding from the United States Department of Agriculture. They help families understand their legal rights, build their family tree, navigate the paperwork and connect with lawyers specializing in heirs property across Alabama. AHPA's mission is to help families protect their land and avoid the risks that come with unresolved heirs property.

If your family has land that's been passed down without a will, don't wait until it's too late. Take action to resolve ownership and secure your family's legacy for future generations. With the right help, you can turn what some call "stuck land" into a protected family resource.

SOURCE Auburn University