One largely ignored issue by those who are inheriting pieces of property is the existence of toxic contamination on that swath of land. This issue ends up becoming an exponentially larger problem when the inheritor attempts to sell the land, and finds out that they’ll have to pay hundreds of thousands, maybe even millions, of dollars to clean it up before it can be sold. Anybody who has the means to help with the clean up are held liable, even those who inherit just 5% of the land. In his article, Paul Sullivan discusses the costly inheritance of contaminated property, and some possible legal solutions to this issue.
The article begins as follows:
VICKI TEMKIN, a lawyer in suburban Los Angeles, inherited a few pieces of property when her mother died in 1999. But she was also left with the responsibility to clean up several acres of land that had been polluted by tenants over the decades.
She spent the better part of the last decade and about $1 million in cleanup fees, and that does not count the additional $1 million or more in lost rent.
“No one was happy about having to clean it up,” said Ms. Temkin, who, with her sister, inherited half of the property. (The other half went to the children of her father’s business partner.)
Inheriting any property is more complicated than receiving securities or cash. If it is a family home, sibling rivalry can wreak havoc. If it is an income-producing apartment or commercial space, someone has to manage it. Or some heirs might want to cash out their share.
But inheriting contaminated properties, even if the deceased owner had nothing to do with polluting the land, is in a category all its own. Known as “toxic succession,” a property passed on with environmental liabilities could end up costing the inheritor more than it is worth.
Find the full article here: Contaminated Property Makes for Costly Inheritance – New York Times
Posted by Pooja Shivaprasad, Associate Editor, Wealth Strategies Journal