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FORMAL TESTIMONY BEFORE THE LEGISLATURE OF THE VIRGIN ISLANDS COMMITTEE ON DISASTER RECOVERY, INFRASTRUCTURE & PLANNING Hearing: “Heirs Property, Prolonged Probate, and Vacant & Abandoned Historic Properties in the U.S. Virgin Islands” Date/Time: Thursday, January 29, 2026 — Block II — 1:30 PM — 5:00 PM Submitted by: Karabo Molyneaux-Molloy, Esq. Owner and Managing Attorney Karabo Molyneaux-Molloy Law Firm (USVI Virtual Law Firm) “Preserving family heritage and prosperity.” Greetings! Honorable Chair Senator Marise C. James, Esq., Vice Chair, and distinguished Members of the Committee: My name is Karabo Molyneaux-Molloy. I am the Managing Attorney of the Karabo Molyneaux-Molloy Law Firm, a U.S. Virgin Islands virtual law firm focused on estate planning for probate avoidance and probate representation. I have also served as a probate law clerk in the Magistrate Division of the Superior Court of the Virgin Islands, District of St. Croix. [ appreciate the opportunity to testify on the interconnected issues of heirs property, prolonged probate, and vacant and abandoned historic properties in the Virgin Islands. These issues are not separate. They are parts of the same system. When legal ownership is unclear, stewardship breaks down. When stewardship breaks down, properties deteriorate. And in historic areas, deterioration becomes permanent loss. My testimony will explain what heirs property is in practical terms, place it within its broader historical context, and then turn to specific Virgin Islands challenges and solutions. I. Definition of Heir and Heirs Property An heir is a person legally entitled to inherit property or assets from a deceased person. “Heirs property” refers to land that has passed from generation to generation without clear estate planning or recorded transfer, meaning without designating beneficiaries through wills, trusts, Transfer on Death (TOD) deeds, or completed probate. II. Practical Consequences of Heirs Property Ownership Heirs property makes it extremely difficult to insure property, borrow against it, pull permits, undertake major rehabilitation, respond quickly after disasters, or sell property in a timely and orderly way. Heirs property is therefore not merely a technical label. It is a structural condition of ownership that explains why properties become stuck, deteriorate, and, especially in historic districts, become vacant and abandoned. II. National Land Loss, Generational Wealth Lost and Heirs Property To understand why heirs property is such a powerful driver of long-term land loss, it helps to look briefly at what has happened nationally when these same ownership patterns persist across generations. Nationally, heirs property has produced THE DISAPPEARANCE OF massive land loss. BLACK FARMLAND | Afican Americans owned roughly sixteen millisen acres of larrnland in 1070. By 1907, they had lost approximately ninety percent of that land, according to the Lino of Concerned Schentivts and the 4unerican Doonomic Assoctarion African Americans owned roughly sixteen million acres of farmland in 1910. By 1997, they had lost approximately ninety percent of that land, according to The [oss fepresenns mot only leet acreage, bur lost generathonal eealch, kost the Union of Concerned Scientists and LEP bee 2 Ble oN I A albe WL build and transfer assets over tire. the American Economic Association. This land loss represents not only lost acreage, but lost generational wealth, lost The USD, has identified heirs propenty as THE LEADING CAUSE of BLACK INOLUNTESRY economic mobility, and lost opportunity ee a ee for families and communities to build and ~~ — oe transfer assets over time. 2|Page Economists estimate the compounded value of Black land loss between 1920 and 1997 at approximately three hundred twenty-six billion dollars, as reported in American Economic Association Papers and Proceedings. The United States Department of Agriculture (USDA) has identified heirs property as the leading cause of Black involuntary land loss. IV. Historical Exploitation of Heirs Property Through Partition by Sale Once land becomes heirs property, it becomes vulnerable to a particular form of act exploitation that has been used for HOW SPECULATORS EXPLOITED HEIRS PROPERTY _ generations: partition by sale. THROUGH PARTITION BY SALE Historically, speculators exploited es ee ee eet heirs property through partition by Acapeeculabar bores a tiny sale. fractional interest from a distant heir—sormetinves as bite a: 13. A speculator would purchase a tiny fractional interest, sometimes as little as one percent, from a distant heir and then use that interest to force a court-ordered sale of the entire family estate. ; iicNoriseaittinas: Maehin & Licurtis Reels feughn for Pauate peta tha farrily’s waterfront land after a speculator bought a smal share ~ One of the most well-documented “ai I SA examples is the case of Melvin and Licurtis Reels in Carteret County, North Carolina. Their grandfather 2 = - did not leave a will, allowing the family” s land to become heirs property. By 2011, the brothers had spent decades fighting to keep their family’s waterfront property. Instead of receiving a hearing, they were ordered jailed for civil contempt and spent eight years incarcerated while continuing to fight their case. This history explains why heirs property is not only an economic issue. It is also a civil and human rights issue. ¥. Uniform Partition of Heirs Property Act (UPHPA) and Virgin Islands—Specific Impacts It is against this historical backdrop that the Uniform Partition of Heirs Property Act was 3|Page created. The Uniform Partition of Heirs Property Act (UPHPA) has been enacted in 22 states, the District of Columbia, and the U.S. Virgin Islands through Act 8169 to prevent exploitative partition practices and protect families from involuntary land loss. In the Virgin Islands, these problems are intensified by: * Longstanding informal family land and oral succession practices; * High rates of off island-migration and a dispersed population of heirs; and + A historic built environment especially vulnerable to neglect and decay. Here, heirs property does not just mean lost equity. It also means lost historic structures, lost neighborhood stability, and lost opportunities for local families to participate in development and recovery on their own terms. The resulting land loss in the Virgin Islands means families lose wealth, lose chances to move ahead financially, and lose opportunities to pass something on to the next generation, while the Territory also loses housing, tax revenue, and small business growth. VI. Framing the Problem: When Title Is Unclear, Stewardship Breaks Down At the heart of today's hearing is a simple chain reaction: 1. A property owner dies without a clear plan—or without probate being completed. 2. Legal ownership becomes fractured or unclear, often across many heirs, some off-island. 3. No single person can lawfully sign, insure, finance, permit, repair, lease, or sell. 4. The property becomes stuck—tax delinquency grows, maintenance stops, and disasters accelerate deterioration. 5. In historic areas, each stalled property has a multiplier effect: it 4|Page undermines adjacent properties, discourages investment, and erodes cultural heritage. Deterioration is not neutral. Once a historic structure crosses a certain threshold—roof failure, termite damage, structural movement—the cost to stabilize can exceed what most families can absorb, especially when they also must pay lawyers, genealogists, appraisers, and court costs. One often misunderstood consequence of this chain reaction is unauthorized occupancy, sometimes called squatting. When no one has clear legal authority to act, vacant structures become easy targets. Families are often told they cannot pursue eviction or trespass because they cannot prove standing. Squatting, in this context, is a symptom of unresolved title and probate bottlenecks. VIL. How Probate Creates a Perpetual Cycle of Heirs Property The System Connection # At this point, it is important to address an uncomfortable Prolonged Probate reality: probate itself can Stalled lagal process wuliplycomwnescwer Unintentionally create a recurring cycle of heirs property. Heirs Property Arioe when properly pases willl a wil, cheating frechured owrerehip Probate is the court-supervised process of settling a person's estate—everything a deceased person owns and owes—after death. When a property owner dies intestate because no beneficiary is named through a deed, will, or trust, the court distributes the property to heirs by statute. Vacant Properties Rarguk whan froeturied CwTHTEhp pAvonts maintensnce ond lary incisions Most probate orders distribute real property to multiple heirs as tenants in common. This is legally correct, but it also establishes the structural conditions for future tangled title. Tenants in common is a form of co-ownership in which each owner holds a fractional, undivided interest in the entire property. No owner has a right to any specific room, unit, or portion of the land. Each share may be sold, transferred, or inherited independently and passes to that owner’s heirs at death rather than automatically to the other co-owners. After a probate case, a court may distribute a property to six heirs as tenants in common. Each heir now owns a one-sixth, undivided interest. 5|Page If each of those six heirs later dies without doing post-probate estate planning, that single property now requires at least six additional probates. Each one-sixth share may then be further divided among children or grandchildren. Within just two or three generations, a single family home can have dozens of co-owners. The probate was completed. But without post-probate planning, heirs property was still created. Over time, fractional interests multiply across generations. Within two or three generations, a single family home can have Tenancy in Common Death of an Heir More Probate Heirs Property: A Self-Perpetuating Cycle Even when probate is completed, failing to plan for fractional interests can create a cycle where a single property requires multiple probates for each new generation of hei Without post-probate planning, fractional shares multiply across generations. g. Probate #1 Army + Brad + Casey inherit real estate 36 cach as tenants in commen, First Generation L Fractional interest multiplies inte at least 6 additional prababes. mfmeasee heageoe Ellict Fiona Grace Henry frls Maar Oliver Adam Anya Brian THIRD GENERATION a #2-6 SS wr-7 ao" Generation gL LOSS SP e@ac®aeone 2 (Dylan Ethan Evanileah Luke Mary Macni Oliver Adam Anya Brian CarliEmma #22 oo Up te 36 fractional owners as the cycle repeats ———_> dozens of co-owners, many living off-island, some unknown, some deceased with unadministered estates requiring probate for each deceased co-owner. This is how we move from probate, to tenancy in common, to death of an heir, to more probate, to fractional shares, to abandoned property. 6|Page VIII. Prolonged Probate: Barriers I See in Practice When probate is delayed for years—or decades—it is rarely because of a single cause. It is usually a combination of legal, evidentiary, administrative and systemic barriers: PROLONGED PROBATE: BARRIERS I SEE IN PRACTICE When probate is delayed for years—or decades—it ig rarely because of a single cause. It is Usually a combination of legal, evidentiary, administrative and systemic barriers: ® Missing or incomplete records (birth, death, marriage, — divonce, name changes, adoptions). : at Difficulty obtaining these records from other states, or are incapacitated. a ee out of eo a ; = “probate dockets. ® The probate docket is frequently. ul Supported by short-term law clerks. rather than dedicated personnel with specialized probate experience 8 No dispute resolution option te resolve combentious issues, ara & Notice and sence challenges ina : va diaspora community. : - = Complex estates where the primary asser is real Property, but cash is limited. =. SYSTEMIC B " » cost of lagel services, surveys, : genealogy tracing and appraisals, 5 ee | if 2 Femnlly:< conflict and “coordination a ae, =k ese a a fi a al ae or a speculative aneny ‘ A. Legal and Evidentiary Barriers * Missing or incomplete records (birth, death, marriage, divorce, name changes, adoptions). * Difficulty obtaining these records from other states. * Multiple generations of unadministered estates—one probate turns into several. * Heirs who cannot be located, are deceased, or are incapacitated. * Families run out of money or resources. B. Administrative Barriers « Court capacity limitations and heavy probate dockets. * The probate docket is frequently supported by short- term law clerks rather than dedicated personnel with specialized probate experience. « No dispute resolution option to resolve contentious issues. « Notice and service challenges in a diaspora community. « Complex estates where the primary asset is real property, but cash is limited. 7|Page C. Systemic Barriers * Cost of legal services, surveys, genealogy tracing and appraisals. « Family conflict and "coordination fatigue" among many heirs. « Lack of immediate incentive—families often act only when a crisis hits (hurricane damage, condemnation, delinquent property tax sale, or a speculative offer). IX. How Prolonged Probate and Heirs Property Produce Vacant & Abandoned Historic Properties Once title is tangled, families confront barriers that directly pvroduce vacancy and abandonment: * Insurance barriers: Insurers HOW PROLONGED PROBATE AND often require a clear named HEIRS PROPERTY PRODUCE VACANT & ABANDONED HISTORIC PROPEERTIES -_ Onee tite is tangled, farnilles confront barters that directly produce vacancy repre sentative. and abandonment: insured or a legally authorized « Financing barriers: Lenders require clear title and author ity teal FINANCING : BARRIERS ; BARRIERS. Lenders require + Permitting barriers: Major Insurers often require chartide and . oo a clear named insured authority. repairs and rehabilitation or a legally authorized . representative. Pies usually require proof of ownership. + Disaster recovery barriers: PERMITTING After storms, unclear title See HL j Major repalrs ane complicates access to weisnn assistance, lawful contracting, and rebuilding. After storms, unclear tithe compaicates access to assistance, lawful conmracting, * Decision paralysis: If multiple owners must agree on . . IF reultigle Gawrers must apres oni repairs, Neo one feels both empowered and repairs, disagree ments can disagreements can stall all action. obligated te pay; delinquency and enforcement risk increase. stall all action. eet MAJOR BARRIERS PRODUCE VACANT & ABANDONED HOMES * Tax delinquency spiral: No one feels both empowered and obligated to pay; delinquency and enforcement risk increase. 8|Page Historic properties are uniquely vulnerable because a modern concrete structure may endure years of deferred maintenance; a historic wood and masonry building often cannot. X. The Uniform Partition of Heirs Property Act (UPHPA): What It Does—and Does Not—Do The Virgin Islands enacted the Uniform Partition of Heirs Property Act through Act No. 8169. This has been a crucial reform because partition actions are often the point at which heirs property is most vulnerable to predatory loss. A. How Partition Actions Result in Land Loss HOW PARTITION ACTIONS RESULT IN LAND LOSS A partition action is 4 court case that aliens any co-owner of property to ask a judpe to either physically divide the Land of, more commonly, order the property sold and the proceeds split among the owners. Partition actions most often arise in inherited property situations, where a family member dies and multiple heirs inherit the property in. common. UPHPA REQUIRES: INHERITARCE Requires courts to apoty statubory factors, including non-economic considerations, Gi Professional Appraisals Mandanes professional appraisals. Gi Statutory Buyout Right Crevtes a slabubory buycrul, right. (i Open-Market Sales Requires open rnarket sabes with: licensed brokers and reporting. Fine, then let's @o to court! AIC T Por PARTMIPOM ACTION ‘Sg @ with one another. A partition action is a court case that allows any co-owner of property to ask a judge to either physically divide the land or, more commonly, order the property sold and the proceeds split among the owners. Partition actions most often arise in inherited property situations, where a family member dies and multiple heirs inherit the property as tenants in common. Each heir owns an undivided percentage interest, even if their share is very small. Over time, as heirs pass away and their interests are further divided through additional probates, ownership becomes increasingly fragmented. Properties may end up with dozens of co-owners, many of whom live off-island or out of state, and who may not communicate When co-owners cannot agree on whether to sell, keep, repair, or manage the property, any single owner — even one holding a small percentage — can file a partition action. 9|Page ran Partition In kind means the Partition by sale means the” —_ court physically divides the court orders the entire property B. Partition Two Ways—In Kind or By Sale Courts can partition property in two ways: Courts Can Partition Property in Two Ways sgl property among the co-owners, sold and divices the money — so each person recelves- among the co-owners, a portion of the land itself. In practice, these sales are This allows families ta keep | often forced, ocour below ownership and manitain a d- | market value, and can penman-~ ‘rect connection to the property, / neninthy remove family land — from the community. 1. Partition in Kind Partition in kind means the court physically divides the property among the co-owners, so each person receives a portion of the land itself. This allows families to keep ownership and maintain a direct connection to the property. 2. Partition by Sale Partition by sale means the court orders the entire property sold and divides the money among the co- owners. In practice, these sales are often forced, occur below market value, and can permanently remove family land from the community. Bottom Line: Partition in kind preserves land. Partition by sale converts land into cash—and often results in permanent loss of generational property. In practice, most partition cases result in a court-ordered sale of the property rather than a physical division. These forced sales frequently occur below market value and can permanently remove family land from the community. This results in the loss of generational property and the growth of vacant and abandoned homes. a. M 10|Page C. Uniform Partition of Heirs Property Act — Key Protections The Uniform Partition of Heirs Property Act requires courts to evaluate a defined set of statutory factors when deciding whether partition in kind would cause “great prejudice,” including practicability of physical division, impact on overall value, Uniform Partition of Heirs Property Act duration of family = ownership, sentimental or ancestral attachment, The Uniform Partition of Heirs Property Act provides important current lawful use, and safeeuards for families who already find themselves in court over inherited wy } ntact aT al property. each co-tenant’s contributions to taxes, insurance, and maintenance. z pal a ‘ere oe 7 Asser Gan es cere ' E ; “ ‘eee dad mteL The Act also expressly prohibits treating any single factor as determinative. D. Why UPHPA Is Stronger Than the Original Partition Statute The Uniform Partition of Heirs Property Act protections are stronger than traditional partition law which relies on a broad “great prejudice” standard and focuses primarily on economic harm. By contrast, the UPHPA: « Requires courts to apply defined statutory factors, including non-economic considerations * Mandates professional appraisals * Creates a statutory buyout right « Requires open-market sales with licensed brokers and reporting * Imposes heightened “disinterested” standards for referees, appraisers, and brokers 11|Page These increased protections represent a significant improvement over the Virgin Islands’ traditional partition statute by increasing fairness and transparency. WHY UPHPA IS STRONGER THAN THE ORIGINAL PARTITION STATUTE The Uniform Partitien of Heirs Property Act protections ane stronger than traditional partition law which relies on a road “great prejudice” standard and Focuses primarity on aconomic harm, (& Defined Statutory Factors Requires courts to apply statubory factors, including non-aconemnic considerations (& Professional Appraisals Mandates professional apprasak. (@ Statutory Buyout Right Creates a tatutery buyout right. © Open-Market Sales Requires opensmarket sales with ftered brokers and reporting. (@ Heightened Standards Impose heightened “disinterested” Standards for nefenees. appraisers, and brokers. BY CONTRAST, THE UPHPA: These increased Protections represent a significant improvernent over the Virgin Islands’ traditional Partition statute by increasing fairness and transparency. a ae oe These increased protections represent a significant impravement over the virgin lands’ traditional partitian stabute by ine creasing fairness and transparency. E. Important Uniform Partition of Heirs Property Act Limitations These are meaningful protections. But it is critical to understand the Act’s limitation. The Uniform Partition of Heirs Property Act is partition reform. It is not probate reform. It helps families once they are already in litigation. It does not clear title. It does not open estates. It does not modernize probate procedures. And it does not fund rehabilitation of deteriorating properties. XI. Prevention Tools in Act 8169: Transfer on Death (TOD) Deeds and Beyond Act 8169 also enacted the Uniform Real Property Transfer on Death Act, which authorizes Transfer on Death (TOD) deeds. A properly executed and recorded TOD deed allows real property to pass to a named beneficiary and avoid probate. This is a great solution. 12| Page A. Example of Heirs Property Issue with a Transfer on Death Deed Even when families use modern planning tools, the same structural risks can reappear. Act 8169 also enacted the Uniform Real Property Transfer on Death Act, which authorizes Transfer on Death deeds. A mother records a TOD deed naming her three children as beneficiaries. cli V3 interest a 1/3 Interest When she dies, the property passes to the three children as tenants in common, each owning a one-third interest. One of those children later dies without a will and leaves four : 1 1 1 children. — x Lal — mel Se 3 a ae Grandehild 1 | Grandchild 2 ' That one-third share is divided into P: Further Generations Divide ' . . 1/4 of 1/3 Interest + 1/12 Interest | | & Multiply Shares four smaller fractional interests. wee pees eb eS Se eee eee Dee eee Oe ee ee Se Over time, a single property can have 20, 30, or even more oo- oewners—miany living off-island or unaware they have an interest. As those grandchildren pass away, their fractional interests may be further divided. Within just two or three generations, a single property can have twenty, thirty, or more co-owners. The first transfer avoided probate. But without post-transfer planning, heirs property was still created. B. Lack of Education on Planning Creates The "Awareness Gap" This leads to what I describe as an awareness gap. Most landowners and heirs do not understand what tenancy in common actually means. They do not understand that inheriting property requires new, affirmative planning. And without that planning, they are almost certain to pass on tangled title to their own 13|Page children. This is how fractional ownership multiplies and creates modern heirs property—even when the first transfer avoided probate. If we fail to address post-probate planning and tenants-in-common estate planning, we will continue to recreate heirs property in every generation, even while trying to fix it in the current one. XII. Coordinated Solutions: Legal, Administrative, and Systemic To return properties—especially historic properties— to productive use, we need coordinated solutions that address authority, capacity, and capital. TO RETURN PROPERTIES TO PRODUCTIVE USE: COORDINATED SOLUTIONS To return properties—especially historic properties—to productive use, we need coordinated solutions that address authority, capacity, and capital. (respectfully recommend: wh ¥ CAPACITY CAPITAL (2) Create triage-based case managenvent to route simple estates and complex mudti-heir estates differently. ( Integrate dispute resolution within probate. |) Standardize forms and checklists to recuce delays and lower costs. (@ Establish dedicated probate staff attorney positions to provide comtinuily and specalized expertise, rather than relying om short-term Lave clerm law clekes. @ Provide enhanced preservation guidance and resource pathways for historically significant properties. (@] Use grants or loan programs to reduce the cost of probate and estate planning, (@ Pair post-probate planning with stabilization or preservation funding, f@ Implement monitoring and annual reporting on UPHPA auteames, including, property retention rates and speculator activiby. Flee peruitarte wan eneryactend fun wancut pom probate piannie, heirs property was till created. ——~ ob wa, —— oo ae a.ne I respectfully recommend the following: + Create triage-based case management to route simple estates and complex multi-heir estates differently. + Integrate dispute resolution within probate. * Standardize forms and checklists to reduce delays and lower costs. * Establish dedicated probate staff attorney positions to provide continuity and specialized expertise, rather than relying on short-term law clerks. * Provide enhanced preservation guidance and resource pathways for historically significant properties. * Use grants or loan programs to reduce the cost of probate and estate planning. + Pair post-probate planning with stabilization or preservation funding. + Implement monitoring and annual reporting on UPHPA outcomes, including property retention rates and speculator activity. 14| Page Closing In closing, Honorable Members, the Virgin Islands does not lack families who care about their land and their history. We lack systems that reliably convert that care into clear legal authority, timely estate administration, and funded stewardship—before historic properties are lost. Heirs property reflects structural gaps in our legal, administrative, and financial infrastructure. The Uniform Partition of Heirs Property Act and TOD deeds are necessary foundations, but they must be paired with probate modernization, early dispute-resolution mechanisms, and post-probate planning pathways that move cases toward resolution while protecting heirs. Thank you for the opportunity to testify. | am available to answer any questions. A USVI Virtual Law Firm preserving family heritage seine karabo@usviestateplan.com KARABO MOL YREAUX-MOLLOY LAW FIRN KARABO MOLYNEAUX-MOLLOY,ESQ. Managing Attorney| Notary Public WIW_USVIESTATEPLAM COM 15|Page