Bronco6G said:

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jpb1999 said:

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agstudent said:

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chris1515 said:

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For estate tax purposes, is a property that is left as an undivided interest going to get a lower appraisal?

If one individual does wish to sell and others do not, how does that work? Can the one force the sale of the entire property?

Very timely thread…

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From my research, yes, for estate tax purposes, you can usually claim a 15%-20% reduction in value.

And yes, one individual can generally force a sale of the entire property. The alternative would be a forced partition, but that tends to be more complicated and the courts shy away from it in lieu of a sale.

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Yuck, if that is true. I was leaning on going into an estate with my 2 other siblings on the land. Not sure what the best way to do this though. We all trust each other and don't want to sell... also don't want to divide up the property.

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Not necessarily true, the devil is in the LLC formation details. You can make it however you want. You can make it have to be unanimous if you want, you can make it require 66%. You can write in the right of first refusals if someone wants to get out. You can make it as restrictive or unrestrictive as you want, my advice is to get a real estate attorney and get everyone on the same page and have the attorney draw it up.

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To clarify, my response on the forced sale was strictly on an undivided interest. If everything is structured through an LLC, I think things are definitely easier to manage and it sounds like that is absolutely the way to go if possible. At that point, there is no longer undivided interest in the property as the LLC is sole owner.

You can disagree all you want. I'm just telling you what has factually happened and what will happen with undivided interest when you can't afford to buy out the remaining interest.

there are too many factors involved in the land, that makes the property more valuable as a whole than it would be splitting it up. Water, elec, road frontage, cultivated areas, wooded areas. Many of these items you just can't split due to location and area of availability and most courts will agree with the one pressing the sale of the land.

Doc Hayworth said:

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You can disagree all you want. I'm just telling you what has factually happened and what will happen with undivided interest when you can't afford to buy out the remaining interest.

there are too many factors involved in the land, that makes the property more valuable as a whole than it would be splitting it up. Water, elec, road frontage, cultivated areas, wooded areas. Many of these items you just can't split due to location and area of availability and most courts will agree with the one pressing the sale of the land.

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In my 40 years of practicing law, I always found that forced sale is the option of last resort, only ordered if there is no physical way to partition in kind.

Martin Cash said:

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Doc Hayworth said:

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You can disagree all you want. I'm just telling you what has factually happened and what will happen with undivided interest when you can't afford to buy out the remaining interest.

there are too many factors involved in the land, that makes the property more valuable as a whole than it would be splitting it up. Water, elec, road frontage, cultivated areas, wooded areas. Many of these items you just can't split due to location and area of availability and most courts will agree with the one pressing the sale of the land.

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In my 40 years of practicing law, I always found that forced sale is the option of last resort, only ordered if there is no physical way to partition in kind.

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The famous Waggoner Ranch sale was a forced sale that was in litigation for 30+ years over undivided interest. The 6666s ranch sale that recently made headlines was a requirement of the will to keep from family heirs dealing with undivided interest. Also, if you are only getting 15%-20% discounts on undivided interest value you are not using people that really track the purchase of undivided interest. Most discounts are much higher when the transactions really are between disinterested 3rd parties. If you are ever fortunate enough to accumulate land, sell it before you die. Cash splits easier than land and each person can go buy their own Heaven and build from there.

It may be a last resort, but I've seen a lot more sales of the entire tract over partitioning when undivided interest is involved. The difference in cultivated land, hunting land, etc, brings a big difference in land value. And some of that just can't be split, unless one ends up giving up acreage to the other to make up the difference in value.

Just my .02 from 40 years of land surveying.

Primogeniture is the answer. Total real estate interest to the eldest male, divide up remaining property among the rest.

Mr. AGSPRT04 said:

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Primogeniture is the answer. Total real estate interest to the eldest male, divide up remaining property among the rest.

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So you're the eldest male ......

For a place like this where there are significant differences in the quality of different parts of the land, how would you go about establishing the value of the different pieces? Would an appraiser be able to handle that? Would a real estate agent giving a bpo(?) be good enough?

As a surveyor…is it a problem partitioning a place out into very specific acreages if something is being split out?

Have family owned land. Owned by LLC. Buying out % of LLC with buyout agreement and terms in LLC to consolidate ownership. Loan was for entire property since it is undivided interests. (have since placed a conservation easement which disallows subdividing) our bank has been great to work with. Small TX town Ag focused bank so my vote is go in that direction.

Lots of ways to do this. My initial advice is spend money on a good lawyer and do it right to avoid future drama and litigation.

You would need to hire a good appraiser. I found out that hunting land can sell for quite a bit more than cultivating fields and Bermuda fields. Also easier to sell.
If it goes to court, and a partition is granted or forced, a surveyor can stake any configuration the court rules on.

Any good Rural Real Estate agent more than likely knows an appraiser for this type of scenario.

Rattler12 said:

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Mr. AGSPRT04 said:

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Primogeniture is the answer. Total real estate interest to the eldest male, divide up remaining property among the rest.

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So you're the eldest male ......

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Im one of those only children, but I don't stand to inherit any land. I do intend to pass on land though and have three kids. It's going to be eldest son's. He can pull an Esau if he wants, second boy gets the right of first refusal, and so forth.

How does an appraiser calculate their fee?

My mother and her 4 siblings are now joint owners of 2 parcels of land of very different levels of quality/value. Its over 1,000 acres combined. And the siblings all have different types of motivation for what to do with their share. It's still very early in the process, but I'm advising they get an actual appraisal and not just something from a real estate agent. I'm hopeful the attorney helping the executor will make the same point.
Undivided interest = really bad idea.

Can I ask you a question about transferring land from elderly parent to LLC/Trust, or anyone really?

I assume the land would have to be purchased from the parent by the LLC? How is the purchase taxed? Could it be bought by $1 or some really low amount? If so, is there some sort of capital gains tax that would still happen?

Next question is about property taxes, but that is secondary.

Yes, I realize I need to talk with a real estate/tax attorney, but just trying to do some initial research.

https://www.wideopencountry.com/largest-ranches-in-the-united-states/

Take out the equity in your home and pay them off if possible

Ooo surveyor.....That explains a lot
You guys make lots of work for my lawyer friends

Kind of a $****ty remark to make.
I bet I don't have one survey that has made any of your "lawyer friends" any money.
Please expand on "that explains alot", don't leave us in suspense.

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