This Juneteenth, Let’s Focus On Real Solutions To Address The Racial Wealth Gap

Black Americans celebrated Juneteenth long before it became a federal holiday. The day commemorates June 19, 1865, when Union Major General Gordon Granger issued an order freeing 250,000 slaves in Texas, signifying the end of slavery in the United States. But over 150 years later, as we celebrate the progress we’ve made to date, we must also recognize there are still barriers to overcome, specifically regarding homeownership.

Millions of Americans dream of owning a home. Emotionally, it represents an important milestone and a symbol of achievement. Financially, it’s an opportunity for homeowners to build generational wealth for their families. Unfortunately, many Americans, and Black Americans in particular, face barriers to creating and preserving that generational wealth for their families—even after they have worked hard to achieve their dreams. This Juneteenth is an opportunity for members of Congress to take a crucial step toward reducing the racial wealth gap in the United States by supporting the Heirs’ Estate Inheritance Resolution and Succession (HEIRS) Act.

The value of Black land loss is around $326 billion

When a homeowner dies without a formal will or estate planning documents, the property informally passes to those legally entitled to the property, such as a spouse or children. This is known as heirs’ property, one of the least stable forms of homeownership. While the heirs can use the property, property records don’t indicate the updated ownership, putting them at risk of losing the property and other legal and financial risks.

While creating a will and estate planning documents can establish clear property rights to a homeowner’s heirs, unfortunately, many homeowners do not take these necessary steps. According to a Caring.com survey of 2,400 people found that while 64% responded that having a will is very or somewhat important, only 32% have one.

Without a will, there are questions about who has rights and responsibilities related to the property. That means heirs are unable to take advantage of the economic benefits available to them as homeowners. For instance, they can’t use the property as collateral for a commercial loan, nor can they take advantage of certain tax benefits afforded to most homeowners. There’s also the risk of partition, a court-ordered process that allows any heir to the property, no matter how small their interest, to force a sale or division of the property. All the owners are forced to sell under partition if the property cannot be physically divided, often selling for far less than market value, further exacerbating the financial harm to these families.

There are still barriers to overcome

While heirs’ property can affect anyone, it is particularly prevalent among Black Americans. It has been called “the worst problem you never heard of” and the U.S. Department of Agriculture has identified it as “the leading cause of Black involuntary land loss.” This is because far fewer Black Americans have a will in comparison to white Americans.

With little awareness of heirs’ property law among many in the legal community, and many Black Americans unable to afford an attorney to guide them through complex legal proceedings, many Black families are forced to give up their properties. It is estimated that nearly 50% of Black-owned land is heirs’ property, and the value of Black land loss is around $326 billion.

However, the HEIRS Act, which is under consideration in Congress, offers a lifeline to families affected by heirs’ property. The bill, which was introduced by Rep. Nikema Williams (GA), Rep. Lizzie Fletcher (TX), Rep. Emanuel Cleaver (MO) and Rep. Byron Donalds (FL), incentivizes states to adopt the Uniform Partition of Heirs’ Property Act (UPHPA), which has been passed in 23 states. The UPHPA provides individuals holding heirs’ property the chance to buy the land without having to put it up for public sale. To incentivize the adoption of the UPHPA, the HEIRS Act provides grant funds to eligible states and nonprofits for legal assistance, so heirs’ property owners can go through the process of updating land records and establishing their title. Importantly, the HEIRS Act also includes funding for education about the importance of estate planning in preventing heirs’ property and preserving generational wealth.

Black Americans in particular face barriers to creating and preserving generational wealth

Protecting property rights enables the creation of wealth through homeownership, as Hernando de Soto, one of the world’s renowned economists, details in his book, “Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.” De Soto, who President Bill Clinton called the ‘world’s greatest living economist,’ believes countries like the U.S. have strong economies because property rights can be proven. In many third-world countries, only a small percentage of people enjoy clear property rights, according to de Soto.

Spurring homeownership is not enough. I would encourage Congress to also focus on addressing barriers like heirs’ property to ensure that homes can be passed down for future generations to come. This Juneteenth, let’s lift the barriers and enable all Americans to lay a foundation for their families’ futures.

Dione Joseph is a National Commercial Underwriting Counsel for the Old Republic National Title Insurance Company and a past president and member of the Ohio Land Title Association.

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