A Definition of Heir Property: It’s Complicated
Families with assets experience greater financial stability and economic mobility as compared to families with the same income but without significant assets. These critical assets, notably savings, not only provide a cushion against economic shocks, facilitating financial stability, but can also provide the feeder capital necessary to get a college education, job training, or a home, factors associated with upward economic mobility.
There is, however, at least one asset type that often requires a significant secondary investment before families can use it for those purposes. Heir property is family owned, inherited land owned by multiple heirs with undivided interests. As such, it is also “the most unstable form of land ownership” in the United States. Families with resources have the means to hire legal counsel and avoid or remediate this complex and often untenable status. However families with low or moderate wealth are often unable to make the secondary investment in managing the land that would unlock its value, even though they are the very families that need it most.
Despite the general economic recovery in the United States, income inequality and wealth inequality are expanding. Perhaps more critically, it is becoming more and more difficult for families with lower wealth or income to achieve upward economic mobility. These two facts, that the wealth and income gaps are large and growing and that the relative economic position of families is becoming more fixed, chip away at the common notion of the American Dream – our ideal of equal opportunity. This is especially true in the South, the region with the lowest upward economic mobility.
In part because of this, many of the “hardest places to live” are in the South and almost all of the counties are rural. Low population density and population outmigration can make housing development, business development, and access to fairly priced financial services more challenging to provide even though those homes, jobs, and savings are critically needed. This occurs in part because of lack of access to capital which is often due to the loss of traditional financial institutions in rural areas.
Southern Bancorp Community Partners was founded in response to that need. Southern is a development finance organization that works to improve family and community net worth in order to promote economic opportunity. Southern and its bank partner, Southern Bancorp, are US Treasury certified Community Development Financial Institutions and, as such, offer lending, banking, and financial development services and promote policies that improve upward economic mobility in the rural Mid-South. These services make a real difference not only in the daily lives of the people in our communities but also the in the trajectories of their families and neighborhoods.