Understanding Heirs’ Property

Without a clear estate plan, your property may leave your heirs with complicated ownership issues, known as heirs’ property. Taking the time to plan your estate can provide peace of mind for your family's future.

Heirs’ property, also referred to as a tangled title, is property inherited without a will, estate plan or court document from the owner who has passed away. This can lead to legal disputes among family members, limited access to resources and loss of generational wealth due to forced sales or costly legal battles.

How Is Heirs’ Property Created?

If a family member dies without a will or court document passing their property to a specific heir or heirs, the property may be transferred by inheritance to multiple family members, who are each considered a tenant with interest in the undivided property. In this scenario, each heir has equal rights to use and occupy the property.

This also means each heir has shared responsibilities and limitations, such as:

• Paying property taxes and upkeep. All heirs are expected to contribute to property-related expenses, which can become difficult to manage collectively.
• Partitioning or selling property. Any heir can file for a partition sale, which can lead to the entire property being sold — even if other heirs wish to keep it.
• Unanimous decision-making. Major property decisions often require agreement among all heirs, which can make it difficult to maintain, improve or sell the property.

As generations pass, the property may be further divided among new heirs, complicating ownership even more. Lacking a clear legal title, heirs often struggle to qualify for resources like home equity loans or disaster relief funds, leaving properties vulnerable to foreclosure or forced sales.

What Can You Do to Avoid Heirs’ Property?

Planning for the future helps prevent legal and financial complications like heirs’ property. Here are steps to take to protect your family’s property and wealth.

• Create a will or trust. Work with a trusted legal advisor to create an estate plan that can ensure your property is passed down as intended.
• Establish a power of attorney. Appoint someone you trust to manage your property and financial affairs in your absence.
• Develop a wealth management plan. This can help you and your family prepare for unexpected situations and emergencies.

Taking proactive steps in estate planning is crucial for protecting your assets and ensuring they benefit future generations.