Expert tips to tackle tangled property titles

(InvestigateTV) — The New York Times reported that Baby Boomers hold $18.9 trillion in real estate assets, which, upon their death, could create complicated probate issues for their inheritors in the absence of a will.

The issue is known as “tangled titles,” a legal complication that could imperil the transfer of generational wealth.

“A tangled title, sometimes called an Heirs Property, is where a person owns a home,” Kate Bulger, VP of Business Development at Money Management International said. “They pass away, but they do so without a clear plan for what’s going to happen to that home.”

Bulger said this is common when someone passes without a will or an estate plan.

“And it’s a challenge because then suddenly the home is owned by multiple people and it becomes really difficult to do things with that home,” she noted.

She explained that without a clear owner, families may have difficulties applying for aid after a disaster or getting insurance.

“And what happens with these often is that, that first generation has a little bit of a tangled title,” Bulger said. “But when they have children, if a plan hasn’t been made for their portion of ownership of that home, then it defaults to all of their children.”

This can lead to a tangled web of who owns what. Experts say tangled titles primarily impact the black community. A study by the Pew Charitable Trust found that black families have the highest percentage of tangled titles at 87%.

Bulger said this is because for generations, black consumers were locked out of the court system.

“If you can’t put a will through probate then, you’re stuck with a tangled title,” she explained.

Bulger also said African Americans did not list just one person in a will because it offered homeowners some protection against “racist and unethical entities” that might try and take their homes away.

Michael Neal with the Urban Institute also studies the history of tangled titles.

He said some ways people could potentially resolve a tangled title is by transferring the deed to one person’s name, splitting the property between multiple people, or forming a cooperative.

Neal also said inheritors should search for the documentation that will prove ownership of the property.

“Particularly for families who may have over time, by time I mean, the last century or more, migrated from one part of the country, like the south, to another part of the country, like the north,” Neal pointed out. “Fortunately, the technological systems that we have today allow us to do that. It does require financial resources, and that’s another area to identify and fully claim the property.”

Money Management International has an article that explains tangled titles and includes tips to resolve them.

Inheritors can also contact their local legal aid for additional help.

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