ULC

Why States Should Adopt UPHPA

WHY YOUR STATE SHOULD ADOPT THE UNIFORM PARTITION OF HEIRS PROPERTY ACT

Heirs’ property is real estate owned by the legal heirs of a previous owner.  Under state laws, multiple heirs take ownership as tenants-in-common, an unstable form of ownership that too often results in the heirs losing their land through a forced partition sale.

The Uniform Partition of Heirs Property Act (UPHPA) was completed by the Uniform Law Commission in 2010.  As of December 2013, UPHPA is the law in Georgia, Nevada, and Montana, and will be considered by many other state legislatures in 2014 because:

  • UPHPA helps families preserve wealth. Higher-income families often preserve wealth for the next generations through sophisticated estate planning.  For many lower- and middle- income families who cannot afford an estate plan, real estate is their most valuable asset. Under current laws heirs’ property is vulnerable to a forced partition sale, often for a price below the fair market value.  UPHPA establishes a due process designed to preserve wealth for the heirs who want to retain their property while allowing other heirs to convert their property to cash at a fair price.
  • UPHPA is narrowly focused.   UPHPA applies only to a small percentage of partition actions:  The subject property must be 1) titled as a tenancy-in-common, 2) with at least one co-tenant who acquired title from a relative, 3) with at least 20% of the ownership interests traceable to a family member, and 4) without a written agreement governing partition.   Unless all four conditions are present, your state’s current partition law will apply.
  • UPHPA protects all owners of heirs’ property.  Whether a person inherits or purchases a share of heirs’ property, the same rules apply to all landowners:  Any owner may petition a court  for partition,  and  all  the non-petitioning  owners have a  right  of first  refusal  to purchase the petitioning owner’s share at its independently appraised value.  If the property is partitioned, all owners are treated equally and will receive an equitable share of the property or the sale proceeds.
  • UPHPA  preserves  the  independent  right  to  contract.  Nothing  in  UPHPA  prevents  a willing buyer and a willing seller from transferring an ownership interest in heirs’ property. Furthermore, if all co-tenants of a parcel of heirs’ property agree in writing to a plan of partition, UPHPA does not apply.

For more information about the Uniform Partition of Heirs Property Act, please contact ULC Legislative Counsel Benjamin Orzeske at (312) 450-6621 or borzeske@uniformlaws.org.