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post 2017 holiday update?

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Been a rough 2017 on the farm. Dad has started having some health issues & it's a good thing it's winter because there's less to do around there right now. They have not made any plans with Sis that they have shared with me. In conversations with us, they were at a point about 3 months ago where they said they were going to start looking for something more manageable but then said "we can't find anything we like" - I'm 100% sure they never looked. They do say that they understand that they will probably need to sell it all to cover their living/medical expenses in the future and that Sis will just have to understand - so that is a big win, but I don't know that they have said anything like that to her.

So, nothing concrete to report. 2018 will be interesting. Dad will either get better & things go on as is or he'll have more issues and then it will come down to Option A: sell all the property and buy something easier/smaller to maintain or Option B: my Sister talks them into something crazy.


Will keep you posted & I'm sure we'll come back for advice as things unfold. Happy New Year to you all - we appreciate you!

Hey Schwack.

I followed your story most all year here, but apologize if this has already come up and I'm repeating.

If you haven't, you need YOUR OWN lawyer. If you have to cough up $$, it will sting, but at least you'll not have huge regrets later. Don't tell anyone about your lawyer, period. Run through the same scenarios with the pro that you've done here and strategize. Be prepared IN ADVANCE. Maybe you'd like to share your legal feedback with your mom later, maybe not. Have the lawyer reduce some options to paper, including a win/win or two. Maybe you'll choose to show those at a family meeting, or maybe to just one person. Or no one.

Don't tell folks, "Welll, we'll never live there, so....". First, you may change your mind, and second, it makes it sound as though Sis/B-I-L "treasure" and "respect" your dad's most treasured possession more than you do. If Dad is an elder, he might believe that. You need the potential leverage, so you love that ranch and want the exact same split as your sister. That should be your start point. Start strong.

I could go on, but my point is to seek independent counsel for ideas. The fact is (based on your posts) you are running out of time with aging parents. It's clear that sis, et al, are running the full-court press. You seem like the peacemaker and the person who just wants everyone to be happy and treated fairly. You seem, frankly, like a very nice guy. Therefore, you need a personal, experienced lawyer to: 1) generate fresh ideas and 2) help you protect what should rightly be yours'. As you know, EVERYTHING could change in a flash, judging from your health comments.

A good probate attorney, maybe just 2-3 meetings with you only, should be on your January calendar.
Been there!

I'm late to the game here. Just found this thread and read its entirety.

Some things to consider.

You should know and fully understand that my tag lines are as follows ....

"I am a slow learner with minimal retention."

"The information I provide you is worth slightly less than what you just paid for it."

-If the parents sell the property, there is likely a Long Term Capital Gain (LTCG) Tax due on the difference between the cost basis and the selling price. Selling a portion to your sister or the entire farm/ranch to someone else is going to likely initiate a tax obligation to your parents. Your parents will have that liability, and I doubt they want that, and I doubt your sister and BIL will help pay that portion of the tax obligation for your parents. If that cool old barn was depreciated over time and your sister wants it, an appraisal or line-itemed asset on the barn's value listed in a land sale from your parents to your sis and BIL would open another tax obligation to your parents. Depreciated asset less the salvage value less the selling price would likely generate a Capital Gain. Otherwise, sell the property with the barn on it to your sis and BIL, don't list the barn, and no obligation hits the radar.

-If the land is held to possibly help offset expense for your parents long term care (I agree with you on this from what i have discerned in the thread) as your parents enter long term care (assisted to hospice care) make an assessment at that time. If they run out of money, the healthcare facility may exchange their care for title to your parents farm/ranch. At this point in time, the economics depend on if parents think they have more expense of living going forward versus what the farm/ranch is worth - time to give it to the health care provider. Otherwise, the farm/ranch would be sold independently to help offset the healthcare expense, remember a LTCG is generated. .... and, the parents may outlive the proceeds generated from the sale. Sometimes it's better to let the healthcare facility "have it". (personally, i have a hard time with this one, giving the farm/ranch to the healthcare provider..) Also, if the parents want to go, or planning to go, the Medicaid route, that farm/ranch needs to be out of their name, years in advance.

-Trust - Parents should set up a Revocable Trust with father and mother as Settlor's (controllers). Whoever passes first, the Revocable Trust passes to remaining/surviving parent. After surviving passes, the Revocable Trust passes to an Irrevocable Trust to be managed by a Trustee or Co-Trustees (you & your sis). Make sure parents bank account(s) titles, life insurance beneficiaries, car titles, IRA's beneficiaries, are changed to reflect Revocable Trust. After sole surviving parent passes all assets will eventually flow into the Irrevocable Trust for you and sis to manage/sell/take etc. Get a Retro-Appraisal (appraisal showing value after death) of assets. Documents - have pre-made, to be signed later by you and sis, Trust forms showing that a pass-thru has taken place and you as Co-Trustees are authorize to do biz(POA) for Trust - attorney's will/should know what to provide for the continuance. Funds from sales of Trust assets will go to a Trust bank account. (Cash sales should go in your pocket :- )) ... ) You or sis will need to apply for an Employee Tax Identification Number for the Trust - That will be the Tax ID for the Irrevocable/Final Trust. As current assets(money) are distributed from Irrevocable Trust bank account to you and sis, K-1's will need to be generated from the Irrevocable Trust, you'll report those on your personal 1040's and the Irrevocable Trust will file a 1041 showing K-1 distributions until all assets are liquidated and funds distributed to the beneficiaries (you & sis). Note: If your parents change accounts titles and beneficiaries and such are executed and changed completely and the Irrevocable Trust portion states a 50/50 split to you and sis - you will not need to probate the Wills or Trust. Stay out of probate, if possible, IMO. Also, parents can insert language options in the Trust, like.... that any disagreement between beneficiaries on final disposition of any asset without resolve will be automatically given to (insert favorite charity here) without dispute and should dispute arise, that beneficiarie(s) will be entitled to $1.00 from the Trust and nothing more from the Trust and will be automatically removed as Co-Trustee. Moral to story, .... don't take a sinner to lunch, take them to church.

-Another consideration, a 1031 Exchange, you definitely will need an attorney, tax advisor and real estate help here. If your folks need to downside, have your sis & BIL buy a house equivalent to the value of the farm/ranch. Your parents would then exchange the farm/ranch for the sis & BIL house of like-kind value. No tax consequences on the trade. Later the house is available to sell for needed long term care funds. The tricky part is in the 1031 law, "sometimes" this is not allowed for a primary residence, and "sometimes" this is not allowed with large amounts of land to trade for a house, on and on, etc. However, I have friends on both sides of this 1031 Exchange equation, one not getting a deal done because of like-kind, yet a good friend of mine traded his 2,500 acre ranch in Bakersfield, CA for a beach house in Santa Barbara, CA...go figure. Remember, the law is not the law - the loophole is the law. Find the loophole or find a "good" attorney.

-Sounds like,....
*sis & BIL dont have 2 nickels to rub together.
*I think you are doing the right thing and seem to be fair minded about all of this.
*Don't be afraid to be bold and honest in discussion, with all party's present, in a mild conversational tone, sis is not afraid of being bold. This is not the time for you to take the High Road, take both lanes of the Middle Road. Call her out in a nice direct non-confrontational way. Also, you can always state, "Sister, it appears to me that....end with....help me understand or explain why I may be misinterpreting?" Sticking to that intro gives sis a chance to defend herself and come out with statements as to why they want to do what they are doing. If she doesn't explain, your "appears to be" statement is getting validated. Your Dad - he'll appreciate this even if he doesn't comment.
*Your mom,....it's inherent that the daughter(your sis) will be assumed to take care of the parents when they are old and in need of help. Just know, your mom is not wanting to destroy that relationship,...unless you step up and say you will be responsible/primary decision maker for them(your parents) as long as they are alive and after; however, your parents have to accept your offer for it to be valid. Sister has an advantage over you. I believe I read where you live away from parents. (I personally consider living away from someone to be in excess of a 4 hour drive. If you're within 4 hours, to me, it's no different than living in the same town. I look at a 300 mile drive no differently than a drive down the block and I am a bit different than most in this viewpoint.) Mom knows sis & BIL don't have 2 nickels, but mom may want daughter close by for long term events. If mom is thinking that, she should come clean to you,....but she won't. Witness this too many times where mom stays silent on the "daughter care hope" topic in many families. (Grandparents sold their farm to my uncle & aunt {in-law, not a daughter in this example}. Grandparents didn't give my dad or the other sibs a chance to buy. Grandparents said they sold the farm to uncle & aunt because uncle & aunt promise them long term care. After 1.5 years, Aunt declares it's too much work. Grandparents end up in long term healthcare facility on their own tab. Uncle & Aunt got the farm. It will make you spit, but hey, they both got what they wanted, right?)

EDIT: Find out if your sis has your parents Medical Power of Attorney. If sis has this document, she's more than a leg-up on you. This tidbit of info will help you verify a whole lot of thoughts in your mind and reality. The rest of the stuff falls into place thereafter and makes it easier to interpret the "Why".


I've short-cutted some to help offset the TL;DR (not really!), and there's likely some responses to come back to poke a hole in the tire, so to speak. I'll come back to fix the flat, so to speak(if I can).

schwack schwack, you definitely aren't alone in these situations. Blood is thicker than water, but I have never seen a thirsty person ask for a glass of blood, if you know what I mean. In person, show me a family with no issues and in 15 minutes, or less, I'll have that family admit an issue they never thought they had..

Psst...
Still say probate atty w/you as sole initial client.
Farmer's post is loaded w/good advice and cautionary tales.
All those fall right into an estate-planning lawyer's wheelhouse. There's time for RE pros, CPAs, etc.. Let YOUR attorney decide that timeline. If you're informed about all the creative ways these lawyers handle complex, often bizarre estate scenarios, you'll see why they should be your first stop. A good one will have seen your situation dozens of times. They will offer a strategy and -important- steps to take in the short-term. Hey, you deserve 50/50 someday.
Fair's fair. Been there.

Sorry to hear but not unexpected.

consider going to your parents and asking them to sell you 3 acres for the same price as they sold to your sister. Ask them for the closing documents, and say you want to match it exactly.

Schwack, sorry to hear this hasn't gone the way it should.

I'd be ready to turn the heat up on the sister and the BIL, they've played their hand and made their selfishness known. No need to be concerned about enjoying each others company during the holidays and let your grievances be silent, I'd be irate and lay it all out there.

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I'd be ready to turn the heat up on the sister and the BIL

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Maybe I'll put a trailer park on my half when the time comes.....

Storage unit. Less maintenance but same hassle

sell you the 3 acres, with deeded easement through sister's property. I doubt the closing has occurred yet, and they can have that placed in the deed.

I'd buy any acres available and build a giant ***** statue or maybe a billboard with "SELFISH" painted on it. A junkyard maybe? Or how about a rescue farm for animals that make a ton of noise throughout the day?

schwack schwack-

*Tough deal to read about.
*Keep steady as best you can.
*You're not out of this deal yet. You have cards to play that you haven't seen. Read on.
*The Sale - Remember, if Dad & Mom sell acres to Sister at a price above what Dad & Mom originally paid, there's a Capital Gains Tax triggered. If they sell for less, Capital Gains Loss.
*If they don't do the "legal" - I guess you mean, survey completed as to what was bought/sold, change deed/title, etc.
*If none of that legal is done, to me, it depends on how the Will, or Trust, designates the ownership pass-thru (assuming the property is not needed to be sold prior for long term health care expenses). If no legal work is/will/was done, and parents pass, and the Will indicates a split 50/50. That opens a can of worms. Don't see why you couldn't go after the Sister & BIL house as your half... I'd visit with an attorney about this, just for some input.
*If the county where your parents live has a CAD (County Appraisal District) system, keep checking it to see if the County Clerk Office shows a change in property lines and ownership or, just enter your Sister & BIL name in the search field and find out if they own any property in said county and see if any of those properties have an address at your parents, or very near. You can confirm if "legal" work was completed in that manner. Usually takes 6 to 8 months for a county to update the record of title/deed change(some county's may be quicker). If CAD doesn't show Sister & BIL paying taxes on their new property - nothing was done.
*If you haven't done so, find out who has Medical Power of Attorney over your parents. In the end, you may not like how that one turns out, or the consequences at their end of life(your parents). Hopefully, Sister has a heart.
*It's all sensitive, but knowing if you and Sister are beneficiaries to your parents bank accounts would be good to know, or if Sister has now graduated to a "signer" on the account(s). If she's a "signer"...well, hopefully Sister has a conscience. This bank account information stuff boils down to a question, direct question, blunt question or however you want to describe it. I don't know an easier more gentle way to find out that info then to ask.
*I am trying to visualize a bird's eye view of this property. If I got the visual correct in my mind,....and should you have to split the property 50/50 in the end, take the half with the parents driveway and stay silent until the property transaction closes. If Sister & BIL didn't play nice with you all the way to the parents passing, stretch a fence across the road denying access and tell them you'll give them an easement to access for $XXX.XX per month, renewable on an annual basis. Otherwise, they can park on one side of the tracks and walk over the railbed berm to get to their house. If they're smart enough to request an easement before hand, this goes out the window.

Seriously, I do hope things work out. It's less stress and better for everyone long term.

However,....

*Very last resort,....stuff down the road,
-If you're forced out in the end and given a small parcel of your choice. Or, you know you are in no position to come out fair/equal in total from a property split. Study the property and take a narrow strip that cuts the property in half, rendering it worthless. Owning a small strip would equate to no difference than owning "an exact half" that would only be of value to Sister & BIL. The small strip that you'll pay taxes on forever will be worth it as opposed to paying taxes forever on a larger acreage that only one buyer (Sister & BIL) would have interest in. Banks won't like it if Sister & BIL need a loan and offer the property up as collateral with you owning the strip cutting it in half. Buyers won't touch it knowing they would have to deal with you to own the entire piece. Sister & BIL now own a bigger piece of the farm that you just saddled them with, they'll pay taxes on it forever, has no value, and has no access unless someone buys your strip. It's not pretty....poison pills never are. You won't be out much money tax-wise. If you get tired of paying taxes, donate it to a charity. Your deduction will likely be more than what you sell it for to Sister & BIL. A "good" appraiser can help you with this (cough cough). Charity can auction it to whoever. Tell your friends(potential auction bidders) how critical the strip is to the said property. Sister & BIL will love you for that. It only gets interesting from there..
-If you end up with the cool barn and you think Sister & BIL like it, tell them you plan to burn it down and have the city or county fire department have a practice controlled burn on the structure. Whether you go through with it, your call.
-I have more, all legal and low cost. Just keep fingers-crossed for a fair outcome.

*Caveat is no capital loss for related parties if transaction is not deemed at arms length. Selling land at a loss most likely would not be considered an arms length transaction.

schwack schwack-

Yep, you didn't mention and I never thought you would cause grief to your parents. Never crossed my mind.

BigPuma brought up a good point on the Capital Loss/Arm's Length deal. I was trying to walk through the how and if someone could unwind a land transaction based on the stated scenario.

Now, in your case, the strip doesn't necessarily have to be in the geographical middle. Review and study where it's most strategically placed to render the property worthless.

Real life example for you and how it worked for these folks below in an entirely different situation than yours -

Husband and wife team, have 2 agriculture properties in the US with the strip scenario. The strip was put in place across both facilities as a defense move against foreclosure. The strip belonged to the wife. Properties on both sides of strip belonged to husband. Wife leased the strip back to husband's business. No mortgage on properties, but had a heck of a bank operating line with land and other assets used as collateral.

Husband drifts and finds a hottie.

Now the "Ex-Wife" owns the strip. Husband's business goes upside down. Ex-Wife cancels the strip lease with now former husband. Bank foreclosed on property to recoup operating line funds. Bank has auction for facilities. Zero bids - nobody wanted the property cause of the strip (it split the property in half strategically on access on one side and piped water and meter on the other side - 6 inch width strip - both ag facilities). You could not buy one side or the other to make the place work - both were rendered worthless without the connecting strip. You got access with one and water with the other, but not both. Ex-Wife was insulated from the business and debt. Bank leased the properties out and arranged a paid lease on the strip to the Ex-Wife. The Ex-Wife is doing very well. The former husband had to change career fields. Hottie got an 8 carat diamond ring. We ate $250,000 in unsecured receivables and were at the back of the credit line with much larger players, and $ amounts, in front of us. Names and places are withheld to protect the innocent - ag is a small world. From what I heard years later, the Ex and the former husband got back together. ....

In the words of REK ~ "The road goes on forever and the party never ends."