Selling Your Land: Taxes, Financial Planning & Family Matters | Land Investor
CONSIDER TAXES & FINANCIAL PLANNING
The first and most important step in selling your ranch is making sure your family’s tax and financial planning is current and competently prepared. This is particularly important for multi-generational ranch families. I say this because they are the most likely to neglect this stage. Modern ranch owners, who have purchased a ranch in the past 20 years or so as a family gathering place, often have excellent tax and financial advice. Traditional ranch families are more likely to be unprepared. It’s never too early to start planning for the tax and financial implications of selling your ranch, but it can be too late. If this is something your family has neglected, there’s still time; just be sure to do this before you list the ranch with a broker. This stage is enormously important if you want to keep as much of the proceeds of the sale for yourself and your family, and prefer not to pay Uncle Sam more than you have to.
TAKE CARE OF FAMILY MATTERS
An integral part of preparing to sell your ranch (again, this is primarily for multi-generational ranch owners) is communicating with your family members. There is an unfortunate irony regarding ranches that have been in the same family for generations; selling the ranch can be a wedge that splits families apart. Planning and communicating can decrease the possibility of this happening to your family.
Here’s a typical scenario: There are four grown kids who now have families of their own. One of the kids stayed on and has worked the ranch for the past 30 years. The others moved off after high school to Seattle or Denver and have lived lives very separate from the ranch. The parents pass on, the kids who don’t live on the ranch want to sell, the sibling who has spent a lifetime working the ranch doesn’t want to sell. They have sweat equity into the land while their siblings were chasing careers in the big city. They have a connection to the ranch their siblings may not understand. Selling means uprooting the family. They have nowhere to go and they may have a child of their own who wants to stay on and ranch.
Working with a family that is at odds on whether or not to sell the ranch is not only a negative process, it’s also a waste of everyone’s time. I don’t have a silver bullet solution for this situation. My advice is to plan, communicate and remember that there is nothing more important than family.
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By Bill Nutt When reviewing my insurance policies recently, I realized that we have owned our ranch near Twin Bridges, Montana for over a decade. Certainly that isn’t long enough to become an expert, but I have learned a few things I’d like to pass along to those considering a ranch purchase. Here’s a list […]