Inheritance legislation is welcome

ANNAPOLIS, Md. — New state inheritance law that went into effect last month will help farm families better protect and preserve wealth and legacies when passing real property across generations, two experts at a University of Maryland conference said this month.

Maryland’s Partition of Property Act, which took effect Oct. 1, could help owners of so-called “heirs property” — that which previously belonged to someone who did not leave a will — protect and manage their farmland.

“We now have a pathway to figure this out, to clear titles but also to benefit from this process,” said Shakisha Morgan, principal attorney of the Morgan Firm LLC who specializes in estate planning. “There’s a light at the end of the tunnel that all of us can benefit from. What this law does has been truly amazing.”

Morgan and state Sen. Malcolm Augustine, D-Prince George’s County, spoke about the changes at a yearly conference held by the university’s Agriculture Law Education Initiative on Oct. 28. Augustine was a key sponsor of the legislation.

Heirs property situations can lead to conflicts among inheritors. Because each heir has an equal share of the property, one of them can force a sale of the property — even if the other heirs don’t want to. It’s called a partition by sale.

Before the new law, “everyone who was involved or interested in the property didn’t always know that a partition sale was going on,” Morgan said. “Or they found out much later in the process and came in and had to try to catch up and were at a disadvantage.”

Now, each owner is required to be notified.

“Let’s say they can’t find everybody,” she said. “Well this law requires that the person who files the partition has to make reasonable efforts to find those people. Even after they do it, the court can mandate that they put a notification onto the property itself.”

The law also creates new requirements in a partition by sale to sell the property at a fair market value. In the past, forced sales were often sold at below-market value, destroying intergenerational wealth.

“In the old paradigm, there wasn’t a lot of incentive (for heirs) to work together,” Morgan said.

When petitioners seek to split up the property — known as a partition in kind — the new law requires the court to evaluate different issues such as each owner’s shares of the property or what each owner has had to spend to maintain the property. The court also has to consider a partition in kind. In the past, Morgan said, the vast majority of cases were solved by a partition by sale.

And if one of the heirs wants nothing to do with the property, the other owners have the right of first refusal to buy out that heir, she said.

“That puts you in a much better situation where, again, it encourages that collaboration within the family… but it also gives you that power to assert that right to keep the property.”