Heir property is an impediment to individual enterprise and a source of personal vulnerability. 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 and entire property. 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. Overall, heirs’ property is owned in common and does not provide stable ownership or facilitate the transfer of wealth across generations. Heirs that are absentee owners or uninterested in property maintenance usually abandon the property. The complications associated with property inherited without a will are well-documented and have persisted for decades. It is hard to get loans, grants, and government assistance based on property ownership because there is no clear title. The lack of clear title also means that the property is less marketable for sale or lease. Estate and transition planning is an important part of maintaining land ownership; and drafting a will provides direction to heirs about what to do with the property after Grandpa dies. Unfortunately, and historically, many farms and families in Alabama and in much of the South do not have written wills, and their land is now owned as “heir property”. This form of fractionated land ownership is usually unstable, and owners must be willing to work together to maintain the land, pay taxes, and make joint decisions about conveyances of the property.
Although organizations like the Federation of Southern Cooperatives and and others have been assisting minority landowners in the South for years, heirs’ property still remains a major barrier to asset building and wealth accumulation among minority audiences. This poster is based on lessons from our current farmland succession planning project funded by a 2018 USDA-NIFA-ERME grant administered by the Southern Risk Management Education Center. We believe that the many lessons from this project have educational value, and the expected results are significant. One of the major lessons from this project is a lack of estate planning among minority landowners and the urgent need for more education and training. The proportion of land owned by heirs is 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 likely contribute to the widening racial wealth gap by depleting existing assets and undermining the transfer of these assets across generations.
|Conference||2019 Extension Risk Management Education National Conference|