CA Estate Planning Blog

Tuesday, April 26, 2016

Toxic Succession: Inheritance When Property Is Contaminated

What happens when part or all of one's estate property is contaminated land?

While there are U.S. laws in place to protect those who buy or sell contaminated property, there is little legal protection for heirs of such property. For this reason, estate planning attorneys rarely discuss this subject with their clients. Unfortunately, this may result in property that is contaminated (unbeknownst to those who own it) being passed to unsuspecting heirs. This can result in heirs being responsible for unanticipated environmental cleanup and even result in them being liable for damages caused by the contamination -- certainly not the scenario the testators planned for.

The Laws Themselves Are Unjust

At the root of the problem is the federal Superfund law, a statute that makes current and past owners jointly and individually responsible for any contamination on the property they own. Even if you buy a property, unaware that many years ago said property housed a gas station, and leaking gas tanks are found on your property, it is your responsibility to have the hazardous structures and substances removed. This can be a serious problem for the inheritor of any piece of property, unless proper investigative research has been done during the estate planning process.

It Could Get Even Worse

It is distressing to realize that even paying for the costly cleanup of your own property, whether you are the testator or the heir, may not be sufficient to solve the problem. Neighbors affected by contamination may also sue property owners, not only for cleaning up the hazardous substance, but for any health problems, medical costs, diminished property values, or other damages that have resulted from the toxins. Of course, the owner of the property can also sue the property owner who originally owned the property at the time it was first contaminated, but that person or company may be long gone, out of business, or deceased.

Steps to Take During Estate Planning to Prevent Leaving Contaminated Property to Your Heirs

When conferring with your estate planning attorney, it is important to inquire about whether your property may be contaminated and, if so, what steps should taken before including that property in your will. Your trust and will attorney will be able to assist you as you take the following precautions:

  • Check into the property's history to see if it previously housed an auto shop, dry cleaner, junk yard, gas station, mine, railroad, or industrial site
  • Take a walking tour of the property, checking for chemical odors, old machinery, oil drums
  • If cause for suspicion exists, you should have environmental investigators check for soil, water, and air contaminants by sending samples for laboratory analysis

Who will foot the bill?

If you are lucky, the previous owner, the one who was actually responsible for the contamination, still may be around to absorb the cleanup expense. It is also possible that the state or local government may have specific funds put away for just such situations. Many counties, cities, and states have stockpiled cleanup money because they want to see contaminated sites redeveloped.

In any case, the problem will have to be remediated as soon as possible, since such contamination spreads and becomes more and more expensive to remove. If you, the owner, are stuck with the cost, you may want to take out an appropriate life insurance possible with the designated heir as beneficiary so that he or she will not have the financial burden of cleanup once they inherit the property.

As far as your heirs are concerned, if they discover that the inherited property is contaminated after you have passed away, and come to the realization that it will cost more to decontaminate the property than it is worth, they have the option of disclaiming the inheritance and leaving the problem in the hands of the government.

Because of complications like toxic succession, it is essential to have an experienced, competent estate planning attorney at your side as you make your arrangements. Working with an expert will ensure that your assets are distributed according to your wishes.


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