January 22, 2019
Dying without a will or without properly structured farmland ownership can make life messy for heirs.
In many of those situations, the next generation owns the land as tenants-in-common, and if the owners can’t agree on how to split the property, they can go to court for a judgment allowing partition by sale, the preferred settlement method in 39 states. This forced sale obligates the family members who want to keep the farm to have the winning bid at a public auction on land they partially own.
Eleven states have created an alternative to this process by passing the Uniform Partition of Heirs Property Act (UPHPA), which allows the tenants-in-common to cash out an owner who wants to sell at an appraised value without having to put the entire property up for sale. It establishes a clear preference for a physical division of heirs property, as opposed to partition by sale, and allows the court to consider factors such as heritage, historical or culture value of the property in deciding how to partition the land.
The new farm bill gives states with UPHPA an additional boost. Frequently, land inherited this way lacks a clear title because not all the fractional interest owners have been identified or legally established, said Thomas Mitchell, a professor at Texas A&>M University School of Law that drafted the UPHPA law.
The new farm bill now allows the owners of “heirs property” as defined under the UPHPA to qualify for a Farm Services Agency farm number and to be eligible for many different USDA programs, including lending and disaster relief programs.
