When you pass, what will your legacy be?
A hallmark of the American Dream is for your children to reach greater heights than your circumstances would otherwise allow. We can give our wisdom, our humor, our work ethic, but few things have a greater impact than the security of passing land. The land passed down is not only important to the legacy of your family, but to your community, and to the economic aspirations of our state and nation.
Unfortunately, Louisiana law currently prevents thousands of families from realizing this security. Louisiana Appleseed estimates that with nearly 175,000 parcels tied up in heirs’ property regimes, thousands of families will not realize this security. Heirs’ Property, also referred to as Tangled Title, is the division of ownership interests between surviving heirs due to the absence of a will. Let us illustrate with an example.
Without a will, you and your two siblings inherited the family home years ago, and you’ve paid taxes on it annually. You want to sell the home and use your share of money to start a business. Your siblings live in different states, and each sibling wants to do something different with the house. The house remains in limbo and is deteriorating quickly because no one can agree on what to do with the house, and banks will not issue a loan to make ongoing repairs without the consent of all the owners. Your sibling decides to go to court to divide, or partition, ownership. Without agreement amongst your siblings, the court auctions the home to distribute the proceeds from that auction to you and the other siblings equally. The home was worth well over $500,000, according to an independent appraiser. However, due to the haste of the auction and the lack of an independent appraisal, it sold for $50,000, or approximately 1/10th of its value. You receive your share which is roughly the amount of taxes you’ve paid on the home since your parents’ passing. You and your siblings are now estranged from each other.
In the absence of a will, a home will always be divided into ownership interests. Not only does this ownership system deny heirs the wealth they can accrue from what their families built (they cannot sell the land easily, they cannot use it as collateral for a loan, and they may even be unable to receive disaster assistance), but as things stand, can put them at risk of losing their ancestor’s legacy.
There is a solution: the Louisiana Uniform Partition of Heirs Property Act (La-UPHPA), introduced as House Bill 175 by Representative and Judge Marcus Carter.
This legislation would bring three key protections to heirs’ property owners in Louisiana. First, it provides families the right to buy out a co-owner who is seeking a forced sale. Second, it encourages courts to weigh family heritage, the potential loss of housing and shelter for the elderly and others living on the property, and other factors when partitioning in-kind. Third, when a sale does occur, the UPHPA requires an open-market sale conducted by a licensed real estate broker, allowing all co-owners the opportunity to benefit from fair market value.
More than half of U.S. states have already passed similar laws. Louisiana, the only Southern state that has not adopted these reforms, can and should join them.
We urge Louisiana lawmakers to pass HB 175, and stand with the advocates, lawmakers, and community members working to protect family land and preserve generational wealth in our state.
