User:Julianna.s.00/Heir property

Background
'''Heirs Property occurs when a deceased person's heirs or will beneficiaries become owners of property (also known as real property) as tenants in common. When a property is probated, a deceased person either has a will and the property is passed on to the named beneficiary, or a deceased person dies intestate, without a will, and the property could be split among multiple heirs who become cotenants. Heirs property cases typically occur because a person dies without a will, making the property part of the intestate estate which will be distributed according to state guidelines. Over time, the number of heirs can increase making it difficult for the property to be sold or divided in the future.'''

'''One of the biggest problems heirs property owners face are how the property is shared among heirs and how it will be divided or sold in the future. Tenancy in common, a method of owning property, allows each person designated as a tenant in common to own an undivided interest in the whole property, with no limit as to how many tenants in common may also have an interest in the whole property at issue. Properties passed to heirs who become tenants in common may devalue over time because of how divided the property can become, which can impact future generations of heir property owners. Other issues which can arise under tenancy in common include the right for each tenant to sell their share without the permission of other cotentants and the right of any cotenant to file a lawsuit requesting the property be partitioned by sale and forcibly sold. Partition by sale is a court remedy used when a parcel of land cannot be physically divided, and the proceeds for the sale are distributed proportionally among the cotenants. Cotenants can request another remedy, partition in kind, which would split the property into parcels proportionate to the shares each cotenant has. Partition by sale are more common than partitions by kind due to the economic benefit they pose to the cotenants. '''

'''Another issue facing those with shares in heirs property is the fact that the title to the property is rarely ever "clear". This means that the deed for the property may not contain all of the cotenants, or it may even list the deceased property owner still. This can pose difficulty for cotenants to access resources like loans, FEMA assistance in the event of a natrual disaster, or other state and federal programs. '''

Impacts of Heirs Property on Communities in the United States
'''Heirs' Property poses significant impacts on minority communities throughout the country, especially in Black communities in the South. Additional communities impacted by heirs property issues include Native American communities and rural, low-income communities in Appalachia. Roughly 30-40% of Black-owned land in the Southern United States is thought to be heirs property.  The main issues presented to these communities regarding difficulties with heirs property are economic concerns and vulnerability concerns.'''

'''Over the last century, heirs' property has contributed to a loss of over 12 million acres of land held by Black landholders. Without clear title to the land, landholders could not profit off of the land or use it as collateral for a mortgage due to discriminatory policies in police at the United States Department of Agriculture. Since cloudy title exists on the property, this may prevent potential business partners or tenants from working with an owner of heirs property further inhibiting the improvement of the property and the livelihoods of the cotenants. Additionally, partition sales led to the forced sale of the land and lower payments to cotenants. '''

'''On the vulnerability side, many plots of heirs property land in the South were left unattended when the tenants migrated north or west to avoid the impacts of Jim Crow laws. Due to the structure of a forced sale, cotenants are also vulnerable to buyouts, which may occur when a real estate developer or someone outside the family buys a cotenants share and forces the sale of the property.'''

Uniform Partition of Heirs Property Act
In 2010, the Uniform Law Commission drafted a model Uniform Partition of Heirs Property Act. As of 2024, the Uniform Partition of Heirs Property Act has been enacted in 23 states and territories and introduced in an additional 6 states. Among other things, it requires improved procedures for serving notice on heirs and determining fair market value if the co-owners of the property are unable to agree. The purpose of the Act is to prevent partition by sale to the fullest extent possible while there are some cotenants who still wish to live on the land while other cotenants may wish to sell the property. The UPHPA outlines three reforms to the law of partition sales in order to address the process of these sales in practice: As stated in the UPHPA, heirs property is defined as:
 * 1) If a co-owner brings a partition action in court, the court must provide an opportunity for the other co-owners to buy out the co-owner who brought the action.
 * 2) If there is no buyout, then the law provides a preference for the court to order a partition in kind and divide the property, rather than order a sale.
 * 3) If a partition in kind is not ordered, the UPHPA requires the court to sell the property at a market sale, not at an auction sale, and specifies a process for the property to be appraised and sold for its fair market value.


 * "(5) real property held in tenancy in common which satisfies all of the following requirements as of the filing of a partition action:
 * (A) there is no agreement in a record binding all the cotenants which governs the partition of the proprty
 * (B) one or more of the cotenants acquired title from a relative, whether living or deceased; and
 * (C) Any of the following applies
 * (i) 20 percent or more of the interests are held by cotenants who are relatives
 * (ii) 20 percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or
 * (iii) 20 percent or more of the cotenants are relatives" 

'''The values of 20% are not established values, but were likely chosen by the drafters of the UPHPA in an attempt to define parameters for heirs property for the purpose of the Act. '''

Legislative History

2018 Farm Bill
'''The Agricultural Improvement Act of 2018 (aka the 2018 Farm Bill) was signed into law on December 20, 2018. This bill''' required the USDA's Farm Service Agency to develop rules allowing heirs' property owners to obtain a farm and tract number, even with cloudy property title. '''§ 12615 of the Agricultural Improvement Act of 2018 delineates the eligibility requirements for operators of heir property land to obtain a farm number in states where the Uniform Partition of Heirs Property Act was enacted. These requirements include:'''


 * a court order which verifies the land as heirs property,
 * a certificate from the local deed recorder stating the recorded owner of the property is deceased and at least one heir is attempting to have the land retitled and placed in the name of the rightful heir,
 * a tenancy-in-common agreement which was approved by the majority of ownership interests in the property which gives a particular owner the right to manage the property as a farm or ranch,
 * tax returns for the farm submitted by the farm operator, self-certification from the farmer stating they have control over the land to operate a farm,
 * or any documentation deemed appropriate by the Secretary. 

'''Farm numbers will be allotted so long as any of the above documentation is submitted by the farm operator to demonstrate their control of the land as a farm.  By establishing a farm number, heirs property owners will be eligible for several programs and provisions established by the USDA including: targeted funding through farm loans, crop insurance benefits, and conservation program benefits. '''

'''Additionally, the Farm Bill established the Heirs' Property Relending Program with the purpose of solving land ownership and succession issues on agricultural land. The process for participating in the program is as follows:'''


 * 1) The USDA will provide loans to eligible lenders, like cooperative, credit unions, and nonprofit organizations
 * 2) Heirs will apply directly to the lenders, and upon receipt of the loan, will repay the loan at the interest rates set by the lenders
 * 3) Heirs can use the loans to resolve any outstanding issues on the title to the property by financing or consolidating the property
 * 4) Heirs obtain clear legal title after resolving outstanding issues related to the title which then allows for heirs to apply for USDA programs as well as other US government resources like FEMA assistance. 

Federal Emergency Management Agency
In September 2021, FEMA developed guidelines for its agents to accept heirs' property documentation to qualify for disaster relief. Traditionally, FEMA accepts property deeds or titles, mortgage payment booklets, property tax receipts, property tax bill, or real property structure insurance. Now, FEMA will also accept a Will or Affidavit or heirship along with the death certificate of the decendent, which names the person seeking assistance as the heir to the property. Documentation can be dated up to a year before the disaster or within 18 months of assistance following a disaster If an heir has to self-certify their claim to a property because the property is considered to be heirs property, the statement must include the following information:


 * 1) The address of the property affected by a disaster
 * 2) How long the claimant has lived in the (now damaged) home as the primary residence prior to a President's declaration of a natural disaster
 * 3) The claimant and/or co-applicant's name and signature
 * 4) A copy of the decedent's death certificate
 * 5) The elements of the following statements and explanations, reproduced in full below from the FEMA website:
 * 6) "I have made a good faith effort, in coordination with FEMA, to obtain and provide a copy of acceptable ownership documentation. I was unable to obtain this documentation because [provide an explanation of the circumstances that prevent standard ownership verification]."
 * 7) "As the nearest relative of the deceased in the line of succession, my ownership includes all the rights and obligations of the deceased. The decedent's name is ________________, and they died on ________________. I understand I must submit the death certificate along with this declaration. I hereby declare under penalty of perjury that the foregoing is true and correct." 

This change in FEMA policy will benefit families who are in possession of heirs property, especially in the South. In Black-majority counties impacted by natural disasters, research has demonstrated more than a third of applicants have been denied due to having cloudy title issues on heirs property they have inherited.