Indiana Initiative Fights to Protect Generational Wealth from Hidden Crisis

INDIANAPOLIS, IN – December 29, 2025 – A significant new effort is underway to protect one of the most vulnerable forms of homeownership in Indiana. The Federal Home Loan Bank of Indianapolis (FHLBank Indianapolis) has announced the launch of the "Indiana Heirs' Property Initiative," a statewide program backed by a $500,000 grant designed to confront and prevent the widespread issue of heirs' property. This collaborative effort brings together the financial backing of FHLBank Indianapolis with the on-the-ground expertise of Indiana Legal Services (ILS) and the community development network of Prosperity Indiana.

The initiative aims to provide a lifeline to families who own property under a clouded title, a situation that often leads to housing instability, economic disadvantage, and the erosion of generational wealth, particularly within low-income and minority communities.

The Hidden Threat to Family Legacies

Heirs' property is real estate passed down through generations without a formal will or proper estate planning. This informal transfer results in a fragmented or "clouded" legal title, where multiple descendants become co-owners, each holding an undivided interest. Often, the property's deed remains in the name of a long-deceased ancestor, making it nearly impossible for the current residents to prove legal ownership.

This legal ambiguity creates profound vulnerabilities. Without a clear title, homeowners cannot sell or mortgage their property, access home equity loans for critical repairs, or qualify for federal assistance programs like FEMA disaster relief. More critically, these properties are prime targets for predatory developers. An outside party can acquire a small ownership stake from a single distant heir and then file a court action to force the sale of the entire property, often well below market value. This process, known as a partition sale, has led to countless families being displaced and stripped of their most valuable asset.

The problem has deep historical roots, disproportionately affecting Black communities. Following the Civil War, land ownership represented a cornerstone of freedom and economic opportunity. However, systemic racism, widespread distrust of the legal system, and a lack of access to affordable legal services meant that many families passed land down informally. This has contributed to a staggering loss of land and wealth over the last century, with some estimates suggesting that Black-owned farmland has decreased by over 80% since its peak in the early 1900s, partly due to issues like heirs' property.

Uncovering the Scale of the Problem in Indiana

Until recently, the full extent of the heirs' property issue in Indiana remained largely unquantified. A landmark December 2024 report commissioned by FHLBank Indianapolis and conducted by Black Onyx Management, titled "Turning Legacy into Opportunity," brought the scale of the crisis into sharp focus.

The study revealed staggering numbers in just two of the state's most populous counties. In Marion County, researchers identified 1,410 existing heirs' properties with a combined estimated value of $194 million. An additional 3,181 properties were deemed "at risk" of becoming heirs' properties, representing another $543 million in value. In Allen County, the report found 484 impacted properties valued at $64 million and another 1,525 at-risk properties valued at $283 million.

Combined, the confirmed heirs' properties in just these two counties represent over a quarter of a billion dollars in real estate locked in legal limbo. This data provides a compelling economic argument for intervention, framing the issue not just as a social problem but as a significant threat to local economies and housing markets. The initiative is a direct response to these findings, transforming data into a targeted action plan.

A Multi-Sector Blueprint for Action

The Indiana Heirs' Property Initiative is built on a strategic partnership model that leverages the unique strengths of each organization. This multi-sector approach is designed to provide comprehensive support, from legal aid to public education.

FHLBank Indianapolis, a government-sponsored enterprise with a core mission to support affordable housing, is providing the foundational $500,000 grant. This investment aligns with the bank's long history of community development, which includes providing nearly $400 million in grants over the last decade through its Affordable Housing Program (AHP) and other initiatives aimed at supporting homeownership.

At the heart of the program is Indiana Legal Services (ILS), a non-profit law firm that will provide free legal assistance to eligible low-income Hoosiers. ILS attorneys will help families navigate the complex process of clearing clouded titles and provide crucial estate planning services—such as drafting wills and trusts—to prevent future generations from facing the same predicament. This direct legal intervention is the most critical step in securing ownership and unlocking the full economic potential of the property for families.

Complementing the legal work, Prosperity Indiana will lead educational outreach efforts. The statewide community development organization will work to inform FHLBank Indianapolis member institutions, community partners, and the public about the risks of heirs' property and the solutions available through the initiative. Raising awareness is key, as many families are unaware of their precarious legal standing until it is too late.

To ensure the program remains effective and data-driven, Black Onyx Management will continue its involvement by providing ongoing data reporting and impact assessment, allowing the partners to measure success and adapt their strategies over time.