Heirs’ property is the term used to describe property which has been passed down through generations of family members by intestacy, rather than through a will. The descendants who inherit the property become tenants-in-common. As the property passes to each new generation, the interests become increasingly fractionalized, resulting in a large number of people having an ownership interest in the same piece of land. Fractionalized interests in land are particularly prominent amongst African-Americans living in rural areas; approximately 80% do not have estate plans.
Because of the number of heirs owning fractionalized interests in the property and the fact that tenants in common may transfer their interest at any time, families owning heirs’ property are vulnerable to losing it to developers or more affluent owners. The loss of heirs’ property commonly occurs through bankruptcy proceedings, creditors’ judgments, tax sales, foreclosure, adverse possession, and partition sales. Partition sales are a court ordered sale of land that can be forced by the action of just one party with an interest in the land. These sales result in the highest bidder becoming the property owner; it is not uncommon for the land to be sold to someone outside of the family. Furthermore, land is generally sold at a fraction of its actual value and the amount re-cooped by family members is reduced by costs associated with the sale and attorney’s fees.
In the South especially, land loss among African American families is a significant problem. According to the Land Loss Prevention Project, of the 15 million acres of land acquired by African Americans after Emancipation, only about 2 million acres remain owned by their descendants. Focusing on one state where this problem has been thoroughly researched, the number of black-operated farms in Alabama dropped from 46,032 in 1954 to 1,381 in 1992, a decrease far outstripping the decrease in white-operated farms during that time period. Much of such losses have been attributed to the above-listed problems associated with heirs’ property.
In October of 2008, a development company called Freeman Beach LLC filed a petition for partition, claiming they had a majority interest in the land.