What Is Heirs’ Property, and Why Does It Matter for Equitable Homeownership?
In season 5, episode 8, of the hit HBO series Insecure, Issa Rae’s character says, “My great-aunt used to always say her will is with God. It wasn’t. It was with the county. They got her house now.” Though the line is said with jest, the reality is that a lack of legally binding wills in the Black community is a major issue, one that seriously limits intergenerational transfers of wealth. Fewer than one-quarter of Black households have a will compared with more than half of white households, a holdover from Reconstruction and Jim Crow, when many Black people could not access the legal system and were unable to draft legally binding wills. But when property is inherited without formal legal documents, it creates issues of sustainability, access to the full economic benefits of ownership, and even sale.
Certainly, intergenerational homeownership and wealth transfers are critical to closing the racial wealth gap, but homeownership is unique because its value is not only in a dollar amount. For generations, government housing policy excluded Black households from homeownership, while subsidizing it for white households. Black homeownership is wealth—but it’s also a symbol of overcoming violence and prejudice and the opportunity to leave a legacy for the next generation. Protecting existing Black homeownership is vital, economically and culturally.
Legal service providers and local policy makers have an opportunity to help address the persistent racial wealth gap by focusing on a key component: intergenerational homeownership transfers.
What is heirs’ property?
When a person dies without a legally binding will, their assets, including real estate, go into probate, a process by which a court decides how much their assets are worth, pays off debts, and works to identify heirs. Since the court needs to identify heirs without the benefit of a will, the court gives children and grandchildren shares in any property owned. This property is what’s known as “heirs’ property,” and it is one of the least stable forms of homeownership because it’s typically fractional, divided between multiple heirs.
Without a clear title, heirs’ property owners cannot access the full wealth-building benefits of homeownership. They are often ineligible for commercial loans and government loans where property is the collateral and for programs like the homestead exemption, which provides assistance to homeowners. This can add thousands to property tax bills annually.
Lack of a clear title also opens the door to partition, a court-ordered process by which any heir, no matter how fractional their interest, can force a sale or division of the property. When a property cannot be physically divided, which is often the case with urban properties, the partition forces all owners to sell. This makes heirs’ properties particularly vulnerable to speculators and developers who can offer to buy out the interest of one heir for a small price and then force a full sale as a fractional owner.
Heirs’ property owners are also vulnerable to property tax foreclosures. Although every state has property tax exemptions and relief programs for certain homeowners, such programs often exclude otherwise eligible homeowners without a clear title. Even if the original owner was approved for an exemption, it will not automatically apply to heirs’ owners. This increases the likelihood of tax foreclosure on heirs’ properties.
Heirs’ property can be an issue for anyone, anywhere in the United States, but research suggests it’s particularly prevalent in rural Black communities across the Black Belt South. This may be because historically, Black-owned land in these communities was more likely to have been owned by ancestors who did not leave wills and estate plans, ancestors who bought their land a generation after Black people were freed from slavery and were subject to white-supremacist-led violence and dispossession, not to mention exclusion from estate planning resources.
Though data on heirs’ property are limited, recent work estimates that roughly one-third of all Black-owned land in the South is heirs’ property—that’s about 3.5 million acres, land that’s worth about $28 billion. Economists have estimated that since 1910, Black families have been stripped of hundreds of billions of dollars because of involuntary land loss. This land matters. Though much attention has been paid to rural farmland, more recent work suggests these issues persist in urban contexts and threaten Black homeownership, particularly as the population of Black homeowners age. For many, buying a home is the biggest financial decision in their lifetime; homeownership is the primary contributor to wealth for Black households. Preserving and transferring this hard-won wealth across generations is critical.
What can be done to address heirs’ property?
Once a property becomes heirs’ property, it can be nearly impossible to get it out of that status. Likewise, many of those who lack wills may lack the resources and expertise to address this status. Among all those without wills, more than 55 percent did not know how to create a will, and 12 percent believed it would cost too much to draft. These issues are solvable by connecting reputable, thoughtful legal services to the communities that most need them.
- Connect lawyers to communities in need: Lawyers doing pro bono work on housing often focus on eviction and housing stability. This support could be extended to help people with less access to lawyers draft legally binding wills to protect their assets. Legal services organizations can help lawyers connect with communities in need of estate planning services, and legal clinics at law schools can teach students how to do this critical work and give them real experience in the field.
- Encourage trusted partners: Lawyers engaging in this pro bono work can connect with and establish partnerships with trusted partners in the communities they wish to serve. Community organizations, such as religious organizations and nonprofits, are often already embedded in these communities. Working with trusted partners can help reach those in need and establish buy-in, as levels of trust may be limited because of a long legacy of racial discrimination in the criminal legal system.
Public policy can also play a key role in issues of heirs’ property.
- State policies, such as the Uniform Partition of Heirs’ Property Act, can give people holding heirs’ property an opportunity to buy the land without having to put it up for public sale. Policies like this can also allow courts to consider noneconomic factors like heritage, and historical or cultural value in deciding how to partition land. So far, the Uniform Partition of Heirs’ Property Act has been passed in 23 states and introduced in 7.
- States and localities can fund legal services providers and estate planners to help homeowners craft legally binding wills that preserve deed and title rights for the next generation and avoid future issues of heirs’ property.
- Although it’s difficult to clear a tangled title, there are communities, particularly in the Black Belt South, where heirs’ property is already a widespread and serious issue. Such communities can fund free probate legal assistance to eligible owners to clear titles and help heirs’ property owners take advantage of property rights.
Title laws and lack of access to legal services are manifestations of the fundamental issue of structural racism in our housing and wealth systems, which created many tools to drive inequities in access to homeownership, outright and intergenerationally. No one policy or intervention will be enough to close the racial wealth gap, but some portions of the gap are more solvable than others. Black wealth loss caused by heirs’ property can be addressed through targeted resources. It’s urgent for lawyers and policymakers to ensure that what is held by older Black households is passed down to the next generation.