Protecting Legacies: Indiana's New Fight Against Heirs' Property

INDIANAPOLIS, IN – December 29, 2025 – A powerful new coalition has formed in Indiana to combat a quiet but devastating threat to housing stability and generational wealth. The Federal Home Loan Bank of Indianapolis (FHLBank Indianapolis) has announced the launch of the "Indiana Heirs' Property Initiative," a landmark program backed by a $500,000 grant designed to resolve and prevent the complex legal issues surrounding heirs' property across the state.

In a strategic partnership with Indiana Legal Services (ILS) and Prosperity Indiana, the initiative translates groundbreaking local research into direct action, offering a lifeline to families at risk of losing their homes and the economic security tied to them.

The Hidden Threat to Family Wealth

Heirs' property is a term for land or a home that has been passed down informally from one generation to the next, typically without a will or proper estate planning. When this occurs, the legal title to the property becomes fractured, or "clouded," among multiple descendants. Each heir holds an undivided interest in the entire property, making it nearly impossible to sell, mortgage, or even repair the asset without the unanimous consent of all living heirs, some of whom may be unknown or difficult to locate.

This legal vulnerability has deep historical roots, disproportionately affecting Black communities. Following the Civil War, land ownership became a cornerstone of freedom and economic aspiration for formerly enslaved people. However, systemic barriers, including a deep-seated distrust of the legal system and a lack of access to affordable legal counsel, led many families to transfer property through informal means. This practice, while born of necessity, created a ticking time bomb for future generations.

Today, the consequences are severe. Heirs' property is highly susceptible to involuntary loss. Predatory developers can identify a single heir, purchase their small fractional interest, and then file a legal action known as a partition sale, forcing the sale of the entire property on the open market. Families are often displaced, and decades of accumulated family wealth are wiped out in a single transaction. Furthermore, without a clear title, owners cannot access home improvement loans, property insurance, or federal assistance programs like FEMA disaster relief, leading to property disrepair and neighborhood blight.

Uncovering the Scale of the Crisis in Indiana

The urgency of the new initiative is underscored by a sobering December 2024 report commissioned by FHLBank Indianapolis and conducted by Black Onyx Management. Titled "Turning Legacy into Opportunity," the study revealed the staggering scale of the heirs' property problem in just two of Indiana's major metropolitan areas.

In Marion County, researchers identified 1,410 existing "impacted" heirs' properties with a combined estimated value of a staggering $194 million. Beyond these, the report flagged an additional 3,181 properties, valued at $543 million, as being "at risk" of becoming entangled in heirs' property issues in the near future.

The findings were similarly stark in Allen County, where 484 impacted properties were valued at a combined $64 million, with another 1,525 properties worth $283 million deemed "at risk." Collectively, the confirmed heirs' properties in just these two counties represent over a quarter of a billion dollars in family assets hanging in a precarious legal balance.

These figures illuminate a previously underestimated economic threat that not only jeopardizes individual families but also undermines the stability of entire communities. The data provides a clear mandate for the targeted intervention that the Indiana Heirs' Property Initiative is now poised to deliver.

A Blueprint for Collaborative Action

At the heart of the Indiana Heirs' Property Initiative is a multi-sector collaboration designed to attack the problem from all sides. The model leverages the unique strengths of a financial institution, a legal aid provider, and a community development network to create a comprehensive support system.

FHLBank Indianapolis is providing the foundational $500,000 in grant funding, anchoring the program and signaling a serious commitment from the financial sector. This funding will directly empower its key partners to scale up their services.

Indiana Legal Services (ILS), a non-profit law firm dedicated to serving low-income residents, will form the legal backbone of the initiative. With the new resources, ILS will expand its capacity to provide free, critical legal assistance to eligible families. This includes offering estate planning services—such as drafting wills—to prevent future heirs' property issues and providing the complex legal work required to clear existing clouded titles, securing legal ownership for families.

Complementing the legal aid is the educational outreach led by Prosperity Indiana, a statewide community development organization. Prosperity Indiana will develop and disseminate educational materials and training programs for FHLBank Indianapolis's member financial institutions, community organizations, and the public. This work is crucial for raising awareness and equipping stakeholders with the knowledge to identify at-risk homeowners and guide them toward available resources.

Ensuring the initiative remains effective and data-driven, Black Onyx Management will continue its involvement through ongoing data reporting and impact assessment, creating a feedback loop that connects research directly to action on the ground.

A Commitment to Community Stability

The Indiana Heirs' Property Initiative is not an isolated act of charity but a strategic extension of FHLBank Indianapolis's long-standing mission to foster affordable housing and community development. For over three decades, the bank has been a pivotal force in the region's housing landscape. Its flagship Affordable Housing Program (AHP) has funneled nearly $400 million into grant programs over the last ten years alone, supporting the creation and rehabilitation of thousands of affordable housing units.

This new initiative complements other FHLBank Indianapolis programs, such as its down payment assistance for first-time homebuyers and home repair grants for qualified homeowners. By tackling the systemic issue of heirs' property, the bank is addressing a root cause of housing instability and wealth disparity, reinforcing its broader commitment to ensuring that more families can access and maintain the full benefits of homeownership.

By transforming data into a targeted, collaborative, and well-funded action plan, the Indiana Heirs' Property Initiative offers more than just a solution to a legal problem; it provides a robust model for protecting family legacies and strengthening the economic foundation of communities for generations to come.