The Challenge of Heir Property
One Hundred and Twenty Years ago, a farmer and his wife bought a tract of land. It wasn’t huge, about 10 acres in all. But it was theirs. They spent their lives farming on it, while raising their 9 children. As they got older, their oldest son stepped in to help out with the farm. One day, the farmer called all of his children together and they decided that when the farmer and his wife passed away, the oldest son would receive the farm. After the couple passed, all of the children honored the farmer’s wishes and the oldest son treated the farm as his own.
Fast forward to the present day and the great-great grandson of the farmer, who by all appearances owns the property, decides to sell the land. However, when he goes to do so, he discovers an unpleasant surprise. Because the family never executed any wills, or signed any deeds of conveyance, the great-great grandson does not own the land. He actually owns a small fractional share with over one hundred of his relatives.
This scenario is not far fetched. In fact, our firm is currently handling two such cases. Although more people are aware of the need for a comprehensive estate plan, for many years having a will was a “rich man’s luxury”. Most families simply determined among themselves how to distribute a person’s property after they passed away. While that may work fine as long as the land stays in the family, once someone tries to bring in an outside buyer chaos ensues. The problem grows larger as each generation continues to operate by agreement.
Our farmer above had nine children, five generations ago. If each of his children had an average of four children, and each subsequent generation had an average of two children, that would mean that at the current generation there are over THREE HUNDRED owners of the land. Each equal share of ownership of the land is worth one third of one percent of the value of the property.
While the problem is not insurmountable, it does usually result in nightmare issues with cleaning legal title up. Eventually, the situation usually winds up in front of a judge who appoints an outsider to sell the land. At the end of the day, the family winds up with very little for their efforts and their family land in a stranger’s hands. How do you prevent such a problem? Through estate planning. If you want to give your land to a specific person, you need to create a will saying so. If you do not, then each of your heirs will take a share of the land upon your death (along with your spouse if you pass away first). At Kraus & Phillips, we can help you craft your plan to ensure your wishes are carried out, and also ensure that the nightmare scenario described above does not happen to your loved ones.
If you find yourself in the situation where you’ve discovered that the land you thought you owned is actually owned by you and dozens, if not hundreds, of your far flung relatives give us a call. We can help you navigate that problem as well.
