W
ealth inequality persists in part due to racial disparities in homeownership rates, with a lesser-known factor contributing to this issue: heirs' property. Heirs' property refers to land passed down through inheritance without formal documentation, leaving owners vulnerable to losing it to predatory investors or the government. Without clear proof of ownership, these properties can become divided and worthless over time.

    This problem disproportionately affects Black households in southern states, where a lack of documentation makes it impossible to quantify the extent of heirs' property. A 2023 analysis by Fannie Mae estimates that at least $32 billion worth of land falls into this category. Recent efforts, including Congressional legislation, aim to rectify past property losses and protect families from future situations.

    In counties with high prevalence of heirs' property, 75% of residents are Black, according to the Fannie Mae analysis. Research shows that between the abolition of slavery and 2001, Black Americans acquired 15 million acres of land, but an estimated 80% was lost over time. Despite economic growth in the South, many households remain unable to benefit from it due to unclear titles and lack of documentation.

    To address this issue, the Federal Home Loan Bank of Atlanta has launched a $5 million fund to assist organizations in preventing and resolving heirs' property concerns. An earlier initiative resulted in 157 cleared titles, releasing approximately $16 million in equity and executing wills for 516 individuals. Congressional legislation, such as the Heirs' Estate Inheritance Resolution and Succession (HEIRS) Act, aims to incentivize states to support legal efforts and provide protections for current property owners.