For immediate release: June 29, 2017
What do you do with Grandma's house or farm when she dies without a will? Without a properly recorded will, the land is distributed to the children of the deceased as "tenants in common." The process leaves the family without a clear and marketable title to family property and may require total agreement on any decision affecting the land. Conflicts that arise from the process can result in physical division of the land or a court-ordered sale and loss of the family property. Additionally, heirs that are absentee owners or uninterested in property maintenance may abandon the property. The complications associated with property inherited without a will, or heirs' property, have been well-known for decades and have persisted for just as long.
"Heirs' Property in the South: Fostering Stable Ownership to Prevent Land Loss and Abandonment" was a conference recently cohosted by the Federal Reserve Bank of Atlanta and the U.S. Forest Service's Southern Research Station. The event assembled a diverse group of stakeholders from research, policy, and practice to discuss the problem of heirs' property in the South and associated solutions.
"We know that stable property ownership is critically important for households and communities," said Raphael Bostic, Atlanta Fed president and chief executive officer. "Unfortunately, properties owned by heirs do not provide stable ownership or facilitate the transfer of wealth across generations." Monica Schwalbach, assistant director for planning and applications with the U.S. Forest Service Southern Research Station, added, "Very little is known about the ecological state of these properties or how they may intersect with publicly managed resources like national forests in the South."
A lack of estate planning was one problem highlighted at the event. The proportion of land owned by heirs is thought to be disproportionately high among racial and ethnic minority groups, low-wealth and low-income households, and other vulnerable populations who are less likely to conduct sophisticated estate planning. Relatively high rates of African American land loss during the 20th century likely contributes to the widening racial wealth gap by depleting existing assets and undermining the transfer of these assets across generations.
Thomas Mitchell, Texas A&M University School of Law professor, delivered the keynote address. Additional panels discussed research to estimate the extent of heirs' property ownership in the South. Panels also explored in-depth issues associated with heirs' property in the Black Belt South, central Appalachia, and Hispanic colonia communities along the U.S.-Mexico border, as well as the problem of land fractionation for Native Americans. Given estimates of heirs' property extent and associated problems, perspectives from legal aid and other service providers were presented, along with a discussion of how heirs' property may contribute to blighted and abandoned properties in cities.
The conference ended with a discussion of how to build on past work and set a research and policy agenda that would mitigate heirs' property formation, protect heirs, and stabilize communities affected by the issue. Critical needs identified by the participants included better public engagement, the need for data uniformity and access for researchers, the creation of additional public-private partnerships to mitigate heirs' property issues, and the need to be proactive rather than reactive, particularly in light of the complications associated with rebuilding heirs' properties after disasters.
Information about the event can be found at frbatlanta.org/news/conferences-and-events/conferences/2017/0615-heirs-property-in-the-south.