Home is where the wealth is
11/05/2013 6:48 PM
11/05/2013 6:48 PM
It’s said all the time: “You can’t take it with you.”
But for too many urban families, nobody is getting it.
In many low-income areas, people haven’t accumulated the assets and wealth that enable them to get ahead. But they often miss one answer that’s right under their roof — the value of homes that have been passed informally from relative to relative.
When people die, their heirs can’t make a legal claim to such property for lack of clear title. Many families hesitate to enter probate proceedings, either not understanding the process or fearing the cost. So they often continue living in a house that they can’t legally sell for the profit — or get a loan for repairs. That leads to abandoned properties.
Legal Aid of Western Missouri’s Urban Core Estate Planning Project is a pilot program that’s about to be expanded. Legal Aid conservatively estimates that the average urban core house in Kansas City is worth $20,000 and that 60 percent of senior homeowners have no means of transferring title upon their death. That puts more than $340 million in wealth at risk of being lost.
The work is done pro bono and usually involves a beneficiary deed, which allows an owner to retain all rights but designates whom the owner wishes to leave the property to upon his or her death. Legal Aid plans to help with 200 to 300 such cases annually.
Leaders in the Ivanhoe neighborhood, which straddles Bruce Watkins Drive south of 35th Street, began to realize the scope of the problem several years ago after receiving city funds to help residents with home repairs. Many people didn’t qualify because they couldn’t prove they owned their homes.
“This happens far too often in low-income areas and in neighborhoods with lower education levels,” said Margaret May, executive director of the Ivanhoe Neighborhood Council. “Homes end up in never-never land, and then the state ends up with it.”
Ida Dockery was aware of the issue, recalling an Arkansas jury trial that her father once participated in where a family lost an inheritance because clear titles were lacking. So Dockery and her husband completed their beneficiary deed with the help of Legal Aid this summer. They have lived in their Euclid Avenue home since 1960, raising two children there.
“It sets an example for the family, giving them things to think about,” Dockery said. “There are some things you should plan on in your life.”