You may own land that you don’t even know exists. Over time, many heirs discover ownership when a relative dies and their death presents problems that no one wants to solve.
For example, these problems result from the passage of decades when a parent, grandparent and great-grandparent simply “passed” down the family’s home or real property to their children, grandchildren and their descendants…so forth and so on.
Now fast forward to present day. That same land has gone through several generations and it isn’t quite clear, legally, who owns it. It’s not known if the land was inherited through a will, deed or verbal instruction. No one cared to ask until either a crisis regarding financing, property taxes or the need to clear title to sell the property arises.
This blog focuses on explaining what heirs’ property is, why it is a problem and solutions on how to avoid its pitfalls.
Heirs’ property is real property that has been inherited by multiple co-owners or heirs which results in co-tenant ownership. This type of ownership in real property by multiple heirs can result in land loss through tax sales and/or forced sale, eviction, family disputes and frustration of an intended but unexecuted estate plan.
5 Ways to Avoid the Problem of Heirs Property
1. Have a clear estate plan which adequately anticipates any possible family problems. For instance, if you have a child who will need the use of the family home for the duration of his or her life, consider leaving the house and parcel on which it sits to that child rather than all of your children or having a plan for the other children to receive equal value in cash.
2. Limit the number of heirs or beneficiaries who will inherit the family land by consolidating title in one or two individuals, creating a Family Trust or a family business entity to hold title.
3. If the property is not a legacy item, consider mandating that the property must be sold after you and your spouse have both died, and that the proceeds must be split among your beneficiaries.
4. Consider probate administration for any deceased co-owners or a quiet title action to clear title to land that will possibly be inherited by your children or grandchildren.
5. Try to keep records of the family tree so that all heirs are traceable in the event that action needs to be taken regarding the co-owned property.