It’s very common for an older deed holder to want to leave what they own to future generations. But can we get specific? Who, exactly, will possess the home?

Because leaving a home to more than one person can get legally murky.

Recently, the problem of unclear deed inheritances came up for discussion in the New York Times.

The reporter spoke with a certified financial planner, who has seen (and personally experienced) the effect in families when a deed holder dies without clearly saying who gets the home. The point is this. If the identity of the next title holder is in any way vague, claiming the home could turn into a mighty big problem after you pass.

Your children and grandchildren might assume that they’re inheriting the family home. But as to who is actually inheriting, what matters is what’s written on legal documents.

What If No Deed Comes Out of Probate?

It happens. A home never goes through the probate court. But the late owner held a deed and has legal heirs.  

The land becomes heirship property. Also known as heirs’ property. But the heirs don’t know about it. No one steps up. Taxes continue to be due on the home until one day the home is seized over the debt and auctioned off. For homes where property values have risen substantially, the tax debt can pile up over the years. 

One day the heirs might learn of their lost land. But at this point, it could be too late to recover the property. Not everyone is up to the task of paying fees to lawyers and cash to lienholders. Some groups of heirs don’t know each other. And some would rather not.

If a deed holder leaves no instructions about the home in a will or a transfer on death deed, relatives can be expected to have different memories about their late relative’s wishes.

Even deed holders who will equal shares of the asset to their children or grandchildren may be leaving their beneficiaries with hard-to-resolve questions about who should be able to possess the home.

A deed is the only document that proves your home is really yours. Here’s how to check for a copy of your deed.

Clarity and Fairness for the Next Generation

There’s so much at stake in these cases. The losses, especially to minority households, can be massive. Consider that more than 40% of Black households’ wealth is in their homes. (It’s less than 20% for families identified as white.) Then consider that Black families have always passed down land through the generations. But historically they were denied professional services that would have kept the title records in order.

A North Carolina business founder expresses hope. Surely, she thinks, it’s possible to find common ground with relatives about her late grandparent’s home? It never went through probate. There’s no transfer on death deed to be found, and no will. Can the loose ends be wrapped up? She wants clarity about the rights of the next generation.

So, the North Carolina business founder prepares to have some uncomfortable chats. She needs to converse with various people related to her mother—people who’d be in line to inherit. Would they establish an agreement whereby she purchases the home? If not, she thinks, the title will stay murky. That could make the home vulnerable to those who’d like to exploit family members.

She’s right. Where a title is unclear, expect potential mischief.

Look Out for Heir Chasers 

Some investment companies seek out families in just this situation. They’ll try to convince one heir to sell their stake in the property’s value.

If they can stake a claim, then people working with the company will petition the local court for a partition sale. Such sales take place under the radar.

Why do courts let this happen? Courts lean into the view that people should be permitted to pull out of a co-ownership if and when they want to. That’s why partition is an option. Unfortunately, heir-chasing developers have used the courts to get good land on the cheap for generations.

But it’s not just the heir chasers that factor into the reasons to act. It’s also the tax collectors. If taxes are going unpaid, the government can take a property. Most property tax foreclosures involve heirship homes.

In any case, when a deceased family member is still the one on the deed, the heirs are paying opportunity costs. They lose wealth, and they lose options—whether they know it or not. They can’t use the home to get a loan to repair it or for any other reason. They can’t rent it out. They can’t apply for assistance, homestead exemptions, disaster relief funds, or the tax breaks available to deed holders.

States Try to Help Heirs Save Homes

Most states have now passed versions of the Uniform Partition of Heirs Property Act. More are coming on board. New Jersey recently enacted a version of the law. And currently, lawmakers are working to enact Pennsylvania’s House Bill 1498 and a Senate companion bill.

This lawmaking will help make sure any potential heirs to a home know about it. To help the heirs save their wealth, the law:

• Calls for fair, professional appraisals of homes of deceased residents.
• Includes provisions that help heirs stay in a home if they currently live in it.
• Allows heirs to have a right of first refusal on the property and facilitates buyouts among the relatives.
• Encourages the heirs to seek financing to buy the home and gives them time to obtain loan approvals.
• Requires the involvement of a professional real estate broker in transferring heirs’ properties.

Much of the heirship property across the country is concentrated in rural areas and in historically Black and minority households. A forthcoming Pennsylvania law could help descendants keep the value of their deceased relatives’ real estate.

Got a Will?  

Somewhere around half the adult population hasn’t written a will. This puts many homes at risk of going astray, rather than where the owner would want them to go.

You know what to do.