DTN Special Correspondent Elizabeth Williams reported today that, “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 DTN article noted that, “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.
“The definition of ‘heirs property’ includes property that passes with or without a will. The main criteria is it must be family-owned and the ownership must be as tenants in common, not joint tenancy. Family-owned is defined as 20% of the ownership interest owned by family or 20% of the co-tenants are family.”
Ms. Williams also explained that, “The farm bill also gives farmers and ranchers who own heirs property in these 11 states priority consideration for legal assistance to help them restructure their legal ownership for greater stability and obtain clear title to their property.
“Iowa is the only Midwest state with this law, which passed in 2018. Other states that have passed the UPHPA are Alabama, Arkansas, Connecticut, Georgia, Hawaii, Montana, Nevada, New Mexico, Texas and South Carolina.”
Today’s DTN article added: “State legislatures in Indiana, Virginia and West Virginia have already introduced UPHPA bills so far this year.
“In Illinois, ‘It is something that we are looking into,’ said Zach Schmidt, assistant director of state legislation with the Illinois Farm Bureau.”
