Taxation & Estate Planning

African Americans and Heir Property

By Joel A. Schoenmeyer

"Heir property" is a concept that's new to me -- it's a way of holding property that is somewhat common about African American farmers in the rural south. Basically, the idea is that property is held "by the family." Perhaps, in the distant past, a property was owned by one individual. That individual dies without a Will, so his or her heirs become owners. When they die, their heirs take over. This causes a boatload of problems -- who owns the property? who can sell it or mortgage it? In times when the economy and/or housing market is bad, heir properties risk foreclosure because no one may take responsibility for the property and pay the mortgage.

I've started to encounter "heir property" in more urban settings. One particular recent case of mine involves getting a number of heir properties squared away. Let me illustrate (changing some of the facts):

-Client's mother dies in 2008 without a Will, owning real estate -- she has 3 heirs (her children)

-Client's aunt died in 2002, unmarried and no children, without a Will, owning real estate -- her property passes one-half to client's mother and one-half to client's uncle

-Client's grandfather dies in 1990, widowed with 3 children, without a Will, owning real estate -- his property passes one-third to each of his children

So, in handling the estate of client's mother, we also have to deal with that estate's interest in the estates of her sister (client's aunt) and father (client's grandfather).

This is messy work that's not particularly satisfying for the heirs, who may not inherit much at the present time. But it's important work for the family on a going-forward basis.

Full post as published by Death and Taxes Blog on August 27, 2008 (boomark / email).