Estate Planning Can Help Prevent Tangled Titles
With homeownership being increasingly inaccessible for low-income individuals, it is more imperative than ever for homeowning families to retain this asset.
January 10, 2020 at 01:05 PM
9 minute read
If you don't have a will, you can count yourself among the majority of Americans. Some people aren't sure where to start the process or haven't gotten around to it, others can't afford it, and still others don't believe a will is necessary for their possessions to be passed along as they wish. This leaves the fate of important assets, like homes, bank accounts and vehicles, unknown when their owners pass away. A home is often the only major asset for families of Philadelphia VIP clients. As detailed below, ensuring it remains with them can be absolutely critical.
VIP is a nonprofit legal services agency that connects low-income clients facing civil legal issues with volunteer attorneys. We work with over a 100 clients every year who are grappling with "tangled title" issues—meaning they are living in and acting as the owners of their family homes, but are not actually on title. We see the effects of a will, or lack thereof, every day as we assist Philadelphians in obtaining title to their homes.
VIP has helped thousands of Philadelphians with tangled title cases and has witnessed just how convoluted these cases can be. Based on data from the cartographic modeling lab at the University of Pennsylvania, VIP estimates there are at least 14,000 tangled titles in Philadelphia. VIP is seeing increased demand—often at a crisis point when home loss is imminent due to tax or mortgage foreclosure—for legal assistance with these high-stakes cases. With gentrification at the doorstep of a number of Philadelphia neighborhoods, it prompts the question: are we doing enough to keep low-income families in their homes?
After years of representing clients in tangled title cases, VIP is answering this question by making significant changes. Through our new estate planning initiative, we will use a preventative approach—equipping those who already own homes with wills—to stop the spread of the tangled title epidemic.
Here's why making wills more accessible matters.
Comprehensive estate planning documents are one of the most effective ways a homeowner can prevent a tangled title. The complications and costs of tangled title cases are distressing for surviving loved ones and especially burdensome for our low-income neighbors. Having a will in place reduces both complication and cost.
VIP client Mr. James, now 80 years old, has lived in his family's West Philadelphia home for his entire life. When his mother, the home's record owner, passed away in 1999, he continued to live there and act as the owner, but did not transfer title. His living companion, Ms. Bennett, who moved in soon after his mother's death, says when they got notice of a water shut-off in January 2019, they almost walked away from the house.
Mr. James and Ms. Bennett take great care in staying up-to-date with bills. Ms. Bennett's daughter, Ms. Tillson, offers to pay their bills online, but Ms. Bennett insists on making the trip to the Philadelphia Municipal Services Building, paying their monthly bills in person and getting a physical receipt, which she keeps in a file.
Ms. Tillson recalls her mother's panic when they got a notice that their water would be shut off. They learned that the shut-off warning was a result of damage to the pipe in front of their house. Without title to the property, they could not enter into a payment agreement for the cost of repairs and, instead, would have to pay the entire amount—thousands of dollars—in a lump sum or face a water shut-off. Unaware of legal services that could help Mr. James get title of the home, they weighed their options. "It's hard out here," said Ms. Bennett, "because people really don't know how to get title in their names, because it's not being talked about."
After contacting several agencies, Ms. Tillson found out about Philadelphia Legal Assistance, which referred Mr. James' tangled title case to VIP for placement with a volunteer attorney. Since Mr. James was his mother's only heir, the probate and deed transfer process was accelerated, and the case resolved in only three months. Still, Ms. Bennett remembers those three months all too clearly. She watched out the window each day, waiting for someone to come shut off their water. The anxiety brought sleepless nights, restless days and a constant fear of being forced to leave their "comfort zone," as they call their home. Although the house and community mean so much to them, they didn't think they could pay for the repairs to prevent a shut-off.
Once Mr. James had a deed putting title into his name, everything changed. Ms. Tillson helped him secure a payment plan for the repairs so that their water could remain on as they paid the bill incrementally. Their sense of relief was enormous.
Mr. James and Ms. Bennett were shocked to hear that the average VIP tangled title case takes over two years to resolve. By contrast, a VIP estate planning case typically takes just 12 hours over two months. The quick turnaround and ease of estate planning cases means that VIP can help more clients with their estate planning needs.
Through VIP's estate planning initiative, we are increasing direct outreach to Philadelphia homeowners to discuss wills. If a potential client expresses interest in VIP's help with estate planning documents, the next step is case intake. For the vast majority of VIP's cases, its sister agencies—Community Legal Services and Philadelphia Legal Assistance—handle initial intake. VIP is using a different approach for our new estate planning effort: enlisting volunteers who are legal professionals, but not necessarily lawyers, to conduct intake interviews, which are usually straightforward for these cases. This approach allows VIP both to significantly expand capacity to process new cases and to engage paralegals, legal assistants and other professionals who are eager for volunteering opportunities.
Philadelphia historically stood out among larger, older cities for its high rate of homeownership across the income spectrum. As recently as 2006, the city's homeownership rate was close to 60%, and, as recently as 2012, close to 38% of homeowners had a household income less than $35,000, see Pew, Homeownership in Philadelphia; On the Decline, 2014) Homeownership was a means to build intergenerational family wealth and forge lasting ties in a neighborhood.
Today, however, homeownership is attainable for a smaller group of people than it once was, for reasons including systemic discrimination. According to information from the U.S. Census Bureau cited by Curbed, between 1950 and 2010 the median value of homes increased at over four times the rate of the median household income. Between 2007 and 2017, the number of owner-occupied housing units in Philadelphia dropped by 8% and, by 2017, the share of renters exceeded homeowners for the first time on record, according to Pew, 2019 State of the City.
With homeownership being increasingly inaccessible for low-income individuals, it is more imperative than ever for homeowning families to retain this asset.
Mr. James and Ms. Bennett expect that Ms. Bennett will take over the home one day when Mr. James passes, but Ms. Bennett is not one of Mr. James' intestate heirs. "I decided to get a will done to keep her in the house," says Mr. James. Upon doing their own research and talking to VIP, the trio recognized that a will was essential for Mr. James to leave the property to Ms. Bennett. It will save her the time, difficulty and cost of trying to find Mr. James' heirs, and if, she received a water shut-off notice down the line, her path to obtain title and deal with such an issue would be clear.
In the gentrifying area of West Philadelphia where the family lives, this clear right to ownership is imperative. Ms. Bennett affirms, "Now I have security. I don't have to worry about someone trying to come here and do something to the house. Now I can show them the will." It will let Ms. Bennett stay in her community—her comfort zone—near the neighbors who watch over her, near her stores and familiar transportation systems, spending the rest of her life in peace in her home.
Ms. Bennett and Ms. Tillson feel particular gratitude for Mr. James' estate planning documents after the family feud that followed Ms. Bennett's mother's death. The lack of certainty about what to do with her home tore the family apart and, they say, created a "war." For the sake of family peace, Ms. Bennett decided not to fight for the home. Ms. Bennett doesn't want her children to have to do the same with Mr. James' home. She too had estate planning documents done and feels at ease about her family's and the home's future.
As VIP rolls out its estate planning initiative, we are hopeful that a significant share of the homeownership cases coming to the offices of legal services providers a decade from now will involve estates with wills. When a client urgently needs title to deal with mortgage foreclosure, they won't need the signatures of their siblings scattered across the country. Family disputes and heartache will be avoided. And today's clients will be empowered with legal counsel to plan their estates thoroughly and thoughtfully.
VIP is looking for volunteer attorneys to represent clients in their estate planning matters and for all legal professionals to do intake interviews with potential clients. Both opportunities have light time commitments and make enormous impact. Please consider helping to equip a low-income homeowner with a will by volunteering with Philadelphia VIP's estate planning initiative. You can sign up at phillyvip.org/volunteer.
(All names used in this piece are pseudonyms.)
Annie Mrazik, Philadelphia VIP's homeownership projects coordinator, performs outreach to potential estate planning clients, oversees volunteer intakes and administers the Tangled Title Fund. She is a 2015 graduate of Saint Joseph's University with bachelor's degrees in international relations and Spanish. She can be reached at [email protected].
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