Last year the Arizona legislature adopted a new law based on a national model. The Uniform Partition of Heirs Property Act looks a little bit like a simplified probate proceeding, though it has a slightly different focus.
The problem: sometimes, and especially after the death of a property owner if no one initiates a probate proceeding, the interests of descendants can be complicated and difficult to determine. A grandchild, for example, might own a 1/32 interest in the property. And her cousin might own a 1/28 interest. There might be a dozen (or more) heirs with varying interests.
This fractionalization leads to a difficult problem in many cases. An heir wanting to cash out their small interest might sell it — perhaps to an outsider. That buyer might then initiate a partition action, forcing the sale of the entire property. Family members can lose their interests, and often for a small portion of the real value of that interest.
This partition of heirs property can divest families of inherited wealth. If the liquidation was more orderly, some heirs might be able to buy out other heirs. Or at least some heir (or a small group) might be tasked with securing the best price possible. Everyone in the family could benefit.
That’s what the Uniform Partition of Heirs Property Act does. It helps head off the opportunistic sale of property and allows for the preservation of generational wealth. It can even allow heirs to end up owning the family property, and at a price that is fair to all involved.
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