What is the “Heirs’ Property Tax Relief Act”? Helping Clear Titles
A new bill to help owners of heirs’ property in South Carolina resolve title issues was signed into law by Gov. McMaster on May 15, 2026. H. 4477 passed unanimously in both the S.C. Senate and the House within the last month and was ratified on May 14.
The widespread support for this bill reflects the growing recognition that heirs’ property – property jointly owned by multiple descendants of the original property owner – is a longstanding problem in South Carolina. The lack of a clear title for heirs’ property frequently leads to both legal complications and family conflict.
Below, we’ll look at what the bill says and does, why heirs’ property is a problem, and whether this legislation can fix it.
What the “Heirs’ Property Tax Relief Act” Does
The “Heirs’ Property Tax Relief Act,” as it’s known, is intended to streamline the process and reduce the financial burden on owners seeking to clear a property’s title.
Beginning with the 2026 tax year, transfers of qualified property to qualified family members will not be considered an “assessable transfer of interest,” and no formal appraisal will be required. Previously, such a transfer would trigger a property appraisal, which could increase the owners’ tax burden.
The Act amends South Carolina Code Section 12-37-3150 and includes the following definitions in subsection (B)(16):
(b)(i) “Heirs’ property” means real property owned by one or more individuals as tenants in common, which was inherited from a relative and for which no formal probate or recorded conveyance transferred clear title to the current owners.
(b)(ii) “Qualified family member” means a person related to the prior owner by blood, marriage, or adoption including, but not limited to, a spouse, child, grandchild, sibling, niece, nephew, aunt, uncle, cousin, or those identified as heir owners by a court of competent jurisdiction.
and the following requirements:
(d) The transfer described in this item is not considered an assessable transfer of interest only if the qualified family members submit affidavits to the county assessor certifying under penalty of perjury that:
- The property qualifies as heirs’ property
- The transfer is between qualified family members, and
- The transfer is for the purpose of clearing title
Once the title is cleared, the property is no longer considered heirs’ property.
Why Heirs’ Property Is a Problem – Consequences of a Cloud on Title
Heirs’ property is created when a property owner dies and the ownership changes but those changes are not properly recorded with the county. It’s often the result of a property owner dying intestate – without a will – but it can also happen if an existing will is not probated. In either case, inheritance is then determined by state law.
Under state intestacy laws, the decedent’s children collectively inherit either 50% of the property (with the other 50% going to the surviving spouse) or 100% of the property (if there’s no surviving spouse). They now own the property in equal, fractional amount as tenants in common. If the situation isn’t addressed, the property can end up with multiple owners with varying ownership interests from different generations.
When changes in ownership are not properly recorded with the county, the result is a “cloud on title,” the legal term for a title with encumbrances or claims. Property without a clear title is:
- Difficult or impossible to sell
- Unable to get or refinance a mortgage or other home-backed loans
- Ineligible for government assistance like FEMA aid
- Expensive and time-consuming to fix later on
Those are just some of the legal and financial issues. Heirs’ property often causes family conflict, as well, if there’s no consensus on whether to keep or sell the property, who should live there, who should pay property taxes and upkeep, and so on. As a joint tenant, one owner may sell or transfer his or her fractional interest without the approval of the other tenants, and/or may file for partition, which can lead to a court-ordered sale of the home.
The situation leaves the owners of heirs’ property uniquely vulnerable to financial liabilities, forced tax sales, court-ordered partition, exploitation from speculators, and other risks. The only remedy is to clear the title.
Will This Act Help?
We hope so. In our experience, many heirs’ property owners don’t clear the title because they don’t realize there’s a problem in the first place, and this act doesn’t address that underlying issue. But this act does address an administrative barrier that could hinder heirs’ property owners who have already decided to clear the title, which could help many South Carolina families.
What To Do Now – Clear the Title and Plan Ahead
Heirs’ property is one of the most common results of what we call Family Malpractice™. With some planning ahead and basic understanding of the probate process, you can avoid burdening your descendants with heirs’ property in the future.
Whether you’re dealing with heirs’ property yourself or you want to avoid creating the problem for your descendants, call Gem at the Gem McDowell Law Group with offices in Myrtle Beach and Mt. Pleasant, SC. Gem and his team handle probate matters and help individuals and families develop personalized wills and estate plans tailored to their unique circumstances. Gem’s also a problem solver who understands how family disputes can complicate inheritance and estate planning, and his goal is to help resolve the legal issues while maintaining good family relationships.
Call today to schedule your free, no-obligation consultation at (843) 284-1021. We look forward to hearing from you.
What is Family Malpractice™, and Have You Committed It?
Have you committed Family Malpractice™?
If you’ve neglected your legal responsibilities regarding your family, then yes, you have.
What is Family Malpractice™?
You’ve heard of attorney malpractice, where an attorney’s misconduct causes problems for a client, and you’ve heard of medical malpractice, where a doctor’s error or negligence causes problems for a patient. Similarly, Family Malpractice™ is when an individual causes problems for his/her family members, usually because of failure to take action on a legal matter.
Problems that are created can be legal, financial, and/or familial in nature. I’ve seen a decedent’s heirs have to go through years of expensive and stressful legal battles over how to divide up assets. I’ve seen people take a huge financial hit because of how property was handled after the owner’s death. I’ve seen families torn apart and relationships permanently ruined due to Family Malpractice™.
While it’s not something you can be prosecuted for, Family Malpractice™ is something to avoid. You can easily do so by knowing some of the common pitfalls that put your family in peril legally and financially, and how to avoid these easily avoidable situations yourself.
When You Have Children but Have No Will, That’s Family Malpractice™
Do you know what happens in South Carolina if you die without a will, leaving behind a spouse and children? When I ask this question in consultations or at live, in-person seminars, most people believe that 100% of the deceased’s probate estate goes to the spouse. This is incorrect. By state statute, the deceased’s probate estate is divided evenly between the spouse, who gets 50%, and the children, who share the remaining 50% among themselves.
This sounds reasonable and fair. But, as straightforward as it sounds, this simple arrangement can cause a lot of problems, usually for the spouse. For instance, if a husband and father dies intestate (without a will), his half of the house is divided equally between his surviving wife and children. So his wife now owns 75% of the house and the children own the other 25%. If she’s not able to keep up with the house payments and wants to downsize, she can’t sell unless her children agree. They then have leverage and can demand more than the 25% of the sales price of the home, or else simply refuse to sell.
Who would do this to their own mother, you ask? Plenty of people, unfortunately. I’ve seen scenarios like these play out many times in my 30+ years of being an attorney. Situations like these can ruin a person financially in their later years and destroy family relationships irrevocably.
The situation becomes even more complicated in blended families where one or both spouses have children from a previous marriage. Imagine then, the surviving spouse may own 75% of the house and the children from a previous marriage own the other 25%. The children from the previous marriage are not required to cooperate with the surviving spouse. They can veto a sale, refinance, etc. They essentially control the property. That is not what the decedent wanted, and that decedent committed Family Malpractice™ with regards to the surviving spouse.
In short, the way an estate is passed along and divided up according to South Carolina law may not be what an individual wants, but if they die intestate, they don’t get a choice – and their heirs have to live with the consequences.
The solution: Have a will drawn up. This is vital if you have a family and especially if you have anything other than a small estate. Dying without a will can potentially create a lot of problems for your heirs that could have been avoided with a current estate plan.
When You Don’t Probate Your Deceased Mom or Dad’s Estate, That’s Family Malpractice™
The idea of a family home being passed down from generation to generation is something many people aspire to. Passing on wealth in the form of real property to your children, and to their children in turn, and so on, is a wonderful gift.
At least, it can be. It’s not uncommon for property passed on after death to become “heirs property,” which can cause a lot of problems for the heirs. This can happen when the surviving children of the original, now-deceased homeowner continue to live in the home but don’t go through the proper legal process to put the property in the new owners’ names. That is going through the probate process. If the same situation repeats for a few generations in a row, you can end up with literally dozens of people (typically, the grandchildren or great-grandchildren of the original owner) who all have legal claims to the property, all while the property is still technically in the original owner’s name.
Why is this such a problem? Because it’s very difficult to sell a house like this, when there are so many owners and a cloudy title. A buyer interested in the property risks having the deal fall through if one of the many owners decides they want more than their proportional share of the sales price or refuses to sell altogether. Getting the title cleared takes extra time and money. Meanwhile, the family members who own the house cannot sell and take the equity in the house, and they may be barred from accessing things that require clear title of ownership, like mortgages, loans, and government programs.
The solution: Ensure your deceased parent’s estate goes through probate. The probate process does not happen automatically; it’s something the executor named in the will must carry out. If there is no will, the probate court names an executor, usually a child or close relative of the deceased.
There are a few roadblocks keeping people from ensuring a deceased parent’s estate goes through probate. One is simply not knowing that it’s needed; they may incorrectly assume that the ownership of the house legally passes from the parent to the child(ren) without having to do anything. Another reason is an aversion to having to pay a lot to probate the estate. But in SC, probate fees are not very high. For instance, probate fees on an estate worth $1 million is just $1,845, which is paid out of the estate, as are attorney’s fees. Finally, some people want to avoid dealing with the government altogether. While this may be understandable, it’s not a good reason to avoid probate. Working with an experienced probate attorney you trust can help you and ensure that your estate is handled legally and fairly.
Read more about probate here on our blog.
When You Don’t Take the 1014(e) Step-Up in Basis, That’s Family Malpractice™
A step-up in basis occurs when the cost basis of an asset, like a home, is adjusted from the original cost basis to the current fair market value upon the death of the owner.
Let’s say your parents bought a house 20 years ago for $150,000, and when you inherited it upon their deaths, it was worth $350,000. If you don’t take the step-up in basis and proceed to sell it, you’ll have to pay capital gains tax on the difference, which is $200,000. If instead you do take the step-up in basis, and have the cost basis of the house increased to $350,000 (the fair market value at the time of your parents’ deaths), then you’ll only pay capital gains tax on the difference between $350,000 and whatever you sell it for in the future.
Depending on the value of the house, and how much that value has grown over time, that can mean saving a lot of money in taxes. When someone does not take this step-up in basis, it can lead to very large tax bills when the time comes to sell the property. There are a few reasons a person may fail to do so; they may not even know that the option exists, or they may mistakenly assume that it happens automatically.
The solution: Take the step-up in basis on property in an estate that you are executor of, or ensure that the executor of your parents’ estate does so. The probate attorney handling the estate can help you. As a probate attorney, my goal is to get the largest step-up in basis possible for my clients in order to reduce their tax liability in the future.
Work with Estate Planning Attorney Gem McDowell
Wills, probate, and step-up in basis are things that most people don’t think about because it’s outside the scope of daily life. But failing to take care of these matters is what I call Family Malpractice™, and it can lead to major legal and financial hassles in the future. Even more devastating, it can cause rifts between family members as they fight over assets in and out of court. Fortunately, these issues are completely avoidable. Work with an estate planning attorney and probate attorney to ensure your estate plan is solid and current and that you’re handling your deceased relatives’ estates correctly.
If you have questions about creating or revising your own estate plan in South Carolina, or you want advice or assistance handling the estate of a deceased relative, contact Gem McDowell at the Gem McDowell Law Group today. Gem has over 30 years of experience as an attorney and has helped countless families in South Carolina create estate plans, avoid mistakes, and fix problems. He and his team can help you understand and avoid committing Family Malpractice™ that can harm your family. Call him at his Mount Pleasant office today at 843-284-1021 to schedule a free consultation.
