There is always hope. And hope is what 67-year-old Roy Seal
will have to settle for, because the family's land-560 acres
southwest of Fort Worth, Texas-is gone.
Seal's hope is that by telling his family's story, others
can head off the trouble, heartache and expense he's endured
the past several years.
"That place was very dear to me," says Seal. "I was raised
there. There are three nice creeks and a swimming hole.
Woods and wildlife-it's a jewel of a place."
In short, his parents transferred the land, undivided, to
their three children. But Roy's brother didn't share the
desire to keep the land in the family as an operating ranch
or for family reunions, vacations and possible retirement
use.
His brother and a niece (the daughter of Roy's deceased
sister) wanted to sell the land in fairly short order after
Roy's mother died in 1997. (His father died in 1986.)
Roy wasn't in a position to buy them out, nor was a nephew
(the son of the deceased sister) who also supported keeping
the land. Even if one of the four owners of what's known as
an "undivided interest" in the land wants to sell, you don't
have much choice.
The result was a rancorous process of argument and
discussion that resulted in the property's sale in early
2000. Now bitterness remains, especially for Roy Seal.
But it's not like he couldn't see this coming. His parents
had given the land to their children in the 1970s and had
declined to follow legal advice to give each child a
specific one-third of the property.
"Mom and Dad thought we would work it out," Seal says. "The
attorneys told them to divide it up. Mom and Dad commented,
'Our children would never fuss over it.' "
They couldn't have been more wrong. Not only was the land
sold, but Roy Seal's co-owners wanted to sell so quickly,
for cash, that he believes the sale price was as much as
$500 per acre below what the heirs could have received if
they had properly marketed the property. In addition, since
they were given the land in the 1970s, Seal had to pay
capital-gains tax on 20-plus years of appreciation.
[PAGEBREAK] All told, Seal estimates the forced sale cost nearly $500,000 between the lost sale revenue and capital-gains taxes that had to be paid.
"Children have a right to mention it, to ask, 'What's going to happen?' " says Darrel Dunteman, a farm financial consultant and the publisher of Ag Executive newsletter. "But people are spooked by doing that. They don't want to look like greedy children watching to see what they get."
It's about more than money, though. "Parents need to ask themselves, 'When we look down from heaven, will we still see the family around the holiday table?' " says Dunteman.
Rather than asking parents face to face, Dunteman mentions these two other ways to approach them:
Write them a letter asking what their plans are in the context of your own hopes and dreams. The written word, carefully considered, can often make confronting the issue easier for you and them.
Talk about these issues in the context of articles you can hand them that illustrate the pitfalls of not planning. Then the problem being discussed is someone else's.
Ron Eberhard, who owns Business & Estate Planning Services Unlimited in Grove City, Ohio, endorses directness. Parents need to be asked, "How do you want this to turn out?" he says.
"They can continue their parenting by writing the rules for what is to happen," adds Eberhard. "If they think the children are always going to be as peaceable as they were under their care, they are lying to themselves."
Sometimes it's enough to plant the seed for estate planning, notes Dunteman. He recalled the case of clients who had several children, only one of whom was farming.
"I had suggested to them that because of their present arrangement with their children, the farming son likely wouldn't be able to continue if the parents died because the son would not end up with enough land," Dunteman says.
Nothing happened for months until Dunteman ran into the father at a fast-food restaurant. "He came up to me and said he had been thinking about those issues and wanted to make some changes," Dunteman says.
There is no one way to work things out, suggests Eberhard. In a case where siblings own an undivided interest, the parents can set rules calling for anyone who wants to sell to let one of their siblings buy at a discounted price, using the lowest interest rate allowed with the seller acting as banker.
"It's a wonderful goal to have harmony in the family, but in a situation like this, unless good rules are in place at division time, it isn't apt to happen," says Eberhard.
These days Roy Seal has contented himself with a new 30-plus-acre farm and a few head of cattle a few hours away from the old homeplace. And he has, on occasion, visited the old place. He has a good relationship with the new owners. No hard feelings.