In the United States, home ownership is one of the most common ways families pass wealth from one generation to the next. But many Americans have not taken the legal steps needed to ensure that their property will pass smoothly to their relatives when they die.
The think tank Detroit Future City looked at that issue in the city of Detroit and discovered more than 5,500 properties with significant title issues. The group has just published a new report with its findings.
Michigan Public Morning Edition host Doug Tribou spoke to the group's CEO Anika Goss and Ashley Williams Clark. Williams Clark is DFC's vice president and director of its Center for Equity, Engagement and Research, which wrote the report.
Doug Tribou: The report is called “Keeping Your Family Home: Addressing the Challenges of Inherited Properties in Detroit.” It was funded by the Gilbert Family Foundation, and the focus of the report is heirs’ properties. What are heirs’ properties and why can they become a problem for families?
Anika Goss: In very simple terms, heirs' properties are inherited properties where someone is living in the home but their name is not necessarily on the deed. Or maybe there are multiple people that have a right to that property, and it ends up having to go to probate court.
DT: What are some of the other complications or some typical complications that come up in that scenario where you can have multiple, several or more people with a stake in a home?
"[N]ot just here in Detroit, but across the country, this issue tends to happen more and more with African-American families."Detroit Future City CEO Anika Goss
Ashley Williams Clark: One of the challenges that we see, and one of the reasons why this report was commissioned, was that people were going to seek resources, important resources that enable them to stay in their homes or make homeownership more affordable, like property tax exemptions or helping with tax foreclosure, which require your name to be on the deed. They were finding out that they did not have legal ownership of their homes.
What this means is that if you're in an heirs' property, it prohibits you from taking out equity from your home. It also might limit your ability to sell the home. So when we talk about the wealth transfer that happens from passing on a home from generation to generation, there's also a piece about just household stability and your ability to stay in a home and the things that that provides.
DT: Detroit Future City looked at the city of Detroit Tax Assessor's data from 2023. You found 5,525 homes where all of the owners currently listed on official city records had died between 2014 and 2022. The combined value of those properties is $268 million. Anika, on an individual level, what can it mean for a family to keep that property?
AG: You actually find — not just here in Detroit, but across the country — this issue tends to happen more and more with African-American families.
I think the most troubling thing about this is the number of properties that are valued over $150,000. So, unlike a lot of the home ownership issues that we report on — [when] we talk about affordable housing or housing for very low income families — these are middle-class families or even upper middle-class families, in some cases. And so, this loss of generational wealth is so problematic.
DT: On a broader level, what are the benefits to Detroit and other cities when families can hold on to properties from generation to generation?
AWC: If the homeowner is not able to access critical home repair dollars or able to know they own the home and invest in that home then that home can also kind of fall into disrepair. So what we see is that it doesn't just impact the individual, it can also have these ripple effects into the neighborhoods surrounding it.
We heard that as part of our focus groups, people who said, 'I inherited this home, but I wasn't ready for homeownership,' and they didn't have the money to take care of it.
DT: Well, the report does include a number of recommendations, and one is to try to clean up the existing titles of heirs' properties. That requires more legal help for residents. And there are many organizations already doing just that. But Detroit Future City is calling for a larger, more coordinated effort between nonprofits and legal aid groups and more funding for them.
You're also suggesting legislation that could reduce the number of inherited homes that end up at auction. Could you tell us about the bill you're recommending?
AWC: So there's a big national movement around something called the Uniform Partition of Heirs Property Act. It goes back to something called intestate succession, which is basically that if there is no will when somebody passes away, there's a whole series of laws that dictate who the family members are that will be able to have some stake of claim into this property.
What you see sometimes happen, especially in high-value areas, is a developer will go and they will purchase one family member's claim, and then they have the ability to force the sale of the property. And oftentimes what can happen is that then the property gets sold for way less than what it's worth. And it also can impact if a family member is living in the home.
What the Uniform Partition of Heirs Property Act does is it creates certain protections in terms of making sure that the home is sold at fair-market value, and that the other family members also have the opportunity to purchase the home. So it creates a bit more protections from developers being able to sell the houses out from underneath the family.
A 2020 Gallup poll that found that only 46% of adults in the U.S. have wills outlining a plan for their assets.
DT: The report cites a 2020 Gallup poll that found that only 46% of adults in the U.S. have wills outlining a plan for their assets. And you also note that there are other cities, including Philadelphia and Jacksonville, trying to deal with heirs' property issues through different programs. So, I think it's worth noting that Detroiters are not alone here. What other approaches to the problems are you seeing in other parts of the country?
AWC: I think that's such an important point to make. Not only that a large proportion of households don't have wills, but also I think there is a deep recognition that has to happen of how Black families especially have not historically had access to the same level of legal resources. As we have conversations about heirs properties, you can always see everybody's heads kind of spinning. "Oh gosh, do I have a will in place? Does my grandmother have a will in place?"
And so we need to make sure that we are investing in the capacity of our system to meet the needs of folks for wills and preparation. But there's also a huge component of just conversation about the need to have a will. And it's frankly can be a really tough conversation to have with yourself and with your family members.
AG: I can't emphasize that enough. It's a very personal conversation, right? And no one wants to really talk about their impending demise. But it happens. It has to be as much a part of owning a home as it is to deciding what happens after you're gone.
Editor's note: Some quotes in this article have been edited for length and clarity. You can listen to the full interview near the top of this page.
