Jump to content

Partition of Jointly Owned Ranch Property


Recommended Posts

We’ve been discussion the partition of ~250 acres of family owned ranch property for several years and have even made some preliminary maps showing division lines/parcels etc. The current owners are my father and some of my cousins. Due to his diminished health, I act as POA for my father with guidance from my sisters (no pics).

 

The property has multiple old barns, several small ponds and a 10 acre lake internal to the property. The property is also situated on a large lake an hour or so away from Dallas and has about 6k Ft of shoreline.

 

Due to some recent events, I would like to push for an immediate partition based on the previous discussed maps. I am writing an email stating I’d like to meet within the next 10 days to sign a letter of intent of the existing division plan. If the other 3 landowners can’t get on board and come up with an amicable partition agreement with 14 days after that, I’d like to begin a petition of partition with the local court.

 

I have yet to send the email to set any of this in motion nor have I met with a lawyer regarding the above plan. What do I need to be aware as I go down this path? Should I have a lawyer draft a Letter of Intent to get all the parties on board once or if we can reach agreement on a partition plan?

Link to comment
Share on other sites

1 minute ago, davidg said:

 

We’ve been discussion the partition of ~250 acres of family owned ranch property for several years and have even made some preliminary maps showing division lines/parcels etc. The current owners are my father and some of my cousins. Due to his diminished health, I act as POA for my father with guidance from my sisters (no pics).

 

The property has multiple old barns, several small ponds and a 10 acre lake internal to the property. The property is also situated on a large lake an hour or so away from Dallas and has about 6k Ft of shoreline.

 

Due to some recent events, I would like to push for an immediate partition based on the previous discussed maps. I am writing an email stating I’d like to meet within the next 10 days to sign a letter of intent of the existing division plan. If the other 3 landowners can’t get on board and come up with an amicable partition agreement with 14 days after that, I’d like to begin a petition of partition with the local court.

 

I have yet to send the email to set any of this in motion nor have I met with a lawyer regarding the above plan. What do I need to be aware as I go down this path? Should I have a lawyer draft a Letter of Intent to get all the parties on board once or if we can reach agreement on a partition plan?

 

Zero experience with this area, but I think it would probably be a good idea to meet with a real estate practitioner with actual experience in this area, both to evaluate your proposed plans and any responses before you file suit.

I think that would help maximize the chances you get a partition that resembles the sort-of-agreed-upon one.

Link to comment
Share on other sites

I would suggest meeting with an attorney to fully understand the partition process and the associated costs.  If nothing else, you will have an understanding of the downside of not coming to an agreement and you will be able to share those downsides with the other parties.

  • Hook 'Em 1
Link to comment
Share on other sites

I have a feeling this isn't going to go the way you think timeline wise. 

This is why in my opinion family stuff should always be in a trust if there's multiple owners of a big place like this or just given to a single owner. The trust would/could have rules about if you want to sell etc. a free for all joint ownership always devolves into this shit because people inherently have no idea how to share. 

Advice above my rant is good advice, I'm just giving you some anecdotal observations from personal and friends experiences on stuff like this. 

  • Hook 'Em 4
Link to comment
Share on other sites

Posted (edited)

Meet with an attorney.  After that, consider meeting with the parties individually if things are at all amicable.  Emails like what you describe have a tendency to create more tension than in-person meetings more often than not.  You always can follow up with an email or certified/rrr letter to memorialize the subject matter of any discussions.  Of course, it might be assumed from your post that shit already has gone downhill, which is what is prompting your desire to partition this land.

Edited by dcbc
  • Hook 'Em 5
  • Like 1
Link to comment
Share on other sites

When it's family, emotions and past history almost always get involved. Someone will think they're getting screwed, even if they can't come up with a counter offer.

If family relations want to be kept, I could see it best if everyone sells. Then if anyone still wants to own land, go do it on your own in a separate transaction. Of course you have some who get sentimental about land that paw-paw's father bought in the 1920s and their desire is to leave it to the next generation. IMO, land is just land. 

Link to comment
Share on other sites

My advice is only no emails... none.  If you can't discuss over the phone, zoom, in person etc, just get a lawyer to handle things. Emails always get people pissed off as they always read them with the angle they are getting screwed.

  • Hook 'Em 5
Link to comment
Share on other sites

To give some additional perspective, we have been discussing partition of the land for almost 8 years. We’ve had 3 meeting this years but more aimed at ownership/management issues of the property and cattle operation. Things were going really well to the point of committing significant $$ upgrading a barn and reworking the dam in the lake.

Our immediacy is driven by the return of a relative who has been convicted of multiple felonies over the years. This person has previously caused thousands of dollars worth of damages to the joint property and personal property of all of the owners on the ranch and presents a significant liability. This person was not supposed to be back on the ranch but upon their return one of the other owners has decided it’s ok for them to go onto the land.

It seems the only way to protect my dads assets is to separate them and prosecute if there is trespassing.

  • Hook 'Em 2
  • Rage+1 1
Link to comment
Share on other sites

6 minutes ago, davidg said:

To give some additional perspective, we have been discussing partition of the land for almost 8 years. We’ve had 3 meeting this years but more aimed at ownership/management issues of the property and cattle operation. Things were going really well to the point of committing significant $$ upgrading a barn and reworking the dam in the lake.

Our immediacy is driven by the return of a relative who has been convicted of multiple felonies over the years. This person has previously caused thousands of dollars worth of damages to the joint property and personal property of all of the owners on the ranch and presents a significant liability. This person was not supposed to be back on the ranch but upon their return one of the other owners has decided it’s ok for them to go onto the land.

It seems the only way to protect my dads assets is to separate them and prosecute if there is trespassing.

 

2 hours ago, immamac said:

I have a feeling this isn't going to go the way you think timeline wise. 

This is why in my opinion family stuff should always be in a trust if there's multiple owners of a big place like this or just given to a single owner. The trust would/could have rules about if you want to sell etc. a free for all joint ownership always devolves into this shit because people inherently have no idea how to share. 

Advice above my rant is good advice, I'm just giving you some anecdotal observations from personal and friends experiences on stuff like this. 

Here's an idea, perhaps.

Rather than a trust, a family limited partnership or even an LLC might be a good ownership vehicle for the property, with family members owning shares/interests/voting rights in proportion to their ownership.  You could have decisions made by majority or super-majority, for example, and leave the property intact and the majority/super-majority may be more tractable than the unanimity required of voluntary partition and the unpredictability and cost of court-ordered partition.

A real-estate lawyer might have some similar ideas.

  • Hook 'Em 1
  • Like 1
Link to comment
Share on other sites

Here's an idea, perhaps.
Rather than a trust, a family limited partnership or even an LLC might be a good ownership vehicle for the property, with family members owning shares/interests/voting rights in proportion to their ownership.  You could have decisions made by majority or super-majority, for example, and leave the property intact and the majority/super-majority may be more tractable than the unanimity required of voluntary partition and the unpredictability and cost of court-ordered partition.
A real-estate lawyer might have some similar ideas.

It’s too far gone now to consider the current owners moving the property into and LLC or LP. I wish our grandfather and then dad and his siblings would have done this type of planning. They always said don’t sell the land but didn’t take into consideration that certain relatives can be shitheads and you don’t want to be in business with them. We really don’t want to sell out completely but that’s really the big hammer to force every to the table to come to an agreement and how to partition. That is our primary goal.

We already have a plan in place for our dads estate upon his death. We will create an LLC to hold the inherited property with each of us heirs having an ownership %. That % will be put into our individual trusts. We will have buyout and exit agreements already in place to take care of the situations we are current at with the other relatives.

We might shift our timeline a bit to speak with a lawyer and get a better feel for the process of forcing a partition or sale.
  • Hook 'Em 1
Link to comment
Share on other sites

This is a big issue all over Texas.  Ranches turning into Ranchettes that are too small to effectively manage.  In my personal situation, we have some generational timberland in East Texas that will get split up as the actuarial tables tell their tales.  There has been some resistance to actually moving properties to some sort of trust or family LLC-such vehicle, but, so far, we have managed to all mutually engage the same forestry consultant under a single contract.  Way better to go to market with more acreage whether you are harvesting or re-planting.

  • Hook 'Em 1
Link to comment
Share on other sites

1 hour ago, davidg said:


It’s too far gone now to consider the current owners moving the property into and LLC or LP. I wish our grandfather and then dad and his siblings would have done this type of planning. They always said don’t sell the land but didn’t take into consideration that certain relatives can be shitheads and you don’t want to be in business with them. We really don’t want to sell out completely but that’s really the big hammer to force every to the table to come to an agreement and how to partition. That is our primary goal.

We already have a plan in place for our dads estate upon his death. We will create an LLC to hold the inherited property with each of us heirs having an ownership %. That % will be put into our individual trusts. We will have buyout and exit agreements already in place to take care of the situations we are current at with the other relatives.

We might shift our timeline a bit to speak with a lawyer and get a better feel for the process of forcing a partition or sale.

this is the right way to approach it, the legal perspective on joint property ownership is "lol choose better partners" because you can't force a partner out of a property unless it's in some other legal decree like a divorce etc. on how to split the asset. 

Even trying to sell the asset with one person rejecting it AFAIK can make the whole thing not able to move forward and there's no legal mechanism to compel the hold out to sell. 

Link to comment
Share on other sites

7 minutes ago, immamac said:

this is the right way to approach it, the legal perspective on joint property ownership is "lol choose better partners" because you can't force a partner out of a property unless it's in some other legal decree like a divorce etc. on how to split the asset. 

Even trying to sell the asset with one person rejecting it AFAIK can make the whole thing not able to move forward and there's no legal mechanism to compel the hold out to sell. 

I'm not a Surly lawdog, but there are circumstances where owners can move to establish a receivership over a property to resolve those kinds of issues.

Link to comment
Share on other sites

this is the right way to approach it, the legal perspective on joint property ownership is "lol choose better partners" because you can't force a partner out of a property unless it's in some other legal decree like a divorce etc. on how to split the asset. 
Even trying to sell the asset with one person rejecting it AFAIK can make the whole thing not able to move forward and there's no legal mechanism to compel the hold out to sell. 

Not sure what you are trying to say but an owner of any portion of an undivided assert in Texas can force a partition or outright sale.
  • Hook 'Em 1
Link to comment
Share on other sites

4 hours ago, davidg said:

Our immediacy is driven by the return of a relative who has been convicted of multiple felonies over the years. This person has previously caused thousands of dollars worth of damages to the joint property and personal property of all of the owners on the ranch and presents a significant liability. This person was not supposed to be back on the ranch but upon their return one of the other owners has decided it’s ok for them to go onto the land.

So your dad and your cousins (heirs of your dad's siblings) own this property jointly? 

This felonious "relative" is a spouse or child of one of the siblings? What is the context of the expectation that the person would not be back on the ranch?

Can some sort of 'game cam' or something similar be set up at places around the property where the feared damage is most likely to occur and when the inevitable happens prosecute to the full extent of the law?

Link to comment
Share on other sites

So your dad and your cousins (heirs of your dad's siblings) own this property jointly? 
This felonious "relative" is a spouse or child of one of the siblings? What is the context of the expectation that the person would not be back on the ranch?
Can some sort of 'game cam' or something similar be set up at places around the property where the feared damage is most likely to occur and when the inevitable happens prosecute to the full extent of the law?

Yes
Yes
Verbal agreement over the last 2 years that the person would not be allowed back into the property I.e. enforcement of a trespass notice that was in effect at the time the person left and has since expired. Sheriff will not issue trespass notice unless all property owners agree and one doesn’t agree now so no way to enforce.
There are cameras but trying to eliminate access before anything happens again.
  • Like 1
Link to comment
Share on other sites

Keep us posted, OP.

I have some ranch acreage, and in 20+ years my kids may have to deal with it. Back when the land had low value, it didn't seem like a big deal. If my son wanted it, he could take less of the rest of the estate. But prices jumped over Covid, and now it's worth something. Enough for me to plan better. I'm thinking about getting a new plat/survey done and recording it as 2 separate tracts of roughly similar value. That way the kids can decide (if they dont want to keep it whole) to sever into already logical "faolir" parts and go their separate ways.

  • Hook 'Em 1
  • Like 1
Link to comment
Share on other sites

We have a similar issue with my wife's family ranch.  My FIL gave his 500+ acre Hill Country ranch to his three daughters (one of which is my wife) - all undivided interests.  My FIL is still alive and actively ranching the land with around 100 cow/calf operation.   The ranch is complete with two houses, barns, and all the associated ranching infrastructure.  He gave the property to his girls in an estate planning effort to reduce inheritance taxes on the eventual date of his passing.  As the story usually goes, my wife does not get along with one of her sisters - at all!

My wife wouldn't mind being bought out by her sisters, but they can't afford it.  Her sisters have no intention to sell and want to pass the land down to the next generation.   That feels good but it doesn't pay the bills.  Our problem is that eventually the maintenance on this place is going to get expensive.  Wells, pumps, solar panels, roads, fences, barns, tractors, etc.  - all require upkeep and maintenance.   As an example, my sister-in-law recently got a quote for $40k for repairing and upgrading the access roads.  They own a neighboring property and have a vested interest in keeping the roads tip-top.  We don't.  Currently, my FIL handles all the ranch expenses with the cattle business.  But that can't last forever.  If we can't sell after my FIL passes away, it could be a big liability (financially for me).  There is a hunting lease that covers the property taxes but the rest will be 33% ours.  We seem stuck and I don't see a way out.  No doubt I'm missing something.  I keep suggesting that we grow pot, but that idea hasn't gotten legs yet with my wife's family. 

Link to comment
Share on other sites

8 minutes ago, BottleRocket said:

We have a similar issue with my wife's family ranch.  My FIL gave his 500+ acre Hill Country ranch to his three daughters (one of which is my wife) - all undivided interests.  My FIL is still alive and actively ranching the land with around 100 cow/calf operation.   The ranch is complete with two houses, barns, and all the associated ranching infrastructure.  He gave the property to his girls in an estate planning effort to reduce inheritance taxes on the eventual date of his passing.  As the story usually goes, my wife does not get along with one of her sisters - at all!

My wife wouldn't mind being bought out by her sisters, but they can't afford it.  Her sisters have no intention to sell and want to pass the land down to the next generation.   That feels good but it doesn't pay the bills.  Our problem is that eventually the maintenance on this place is going to get expensive.  Wells, pumps, solar panels, roads, fences, barns, tractors, etc.  - all require upkeep and maintenance.   As an example, my sister-in-law recently got a quote for $40k for repairing and upgrading the access roads.  They own a neighboring property and have a vested interest in keeping the roads tip-top.  We don't.  Currently, my FIL handles all the ranch expenses with the cattle business.  But that can't last forever.  If we can't sell after my FIL passes away, it could be a big liability (financially for me).  There is a hunting lease that covers the property taxes but the rest will be 33% ours.  We seem stuck and I don't see a way out.  No doubt I'm missing something.  I keep suggesting that we grow pot, but that idea hasn't gotten legs yet with my wife's family. 

You can't afford 15k to keep a 500 acre ranch? Lmao. You have bigger problems than the ranch. 

  • Hook 'Em 1
Link to comment
Share on other sites

9 minutes ago, immamac said:

You can't afford 15k to keep a 500 acre ranch? Lmao. You have bigger problems than the ranch. 

Will you give me $15k (just the tip) to maintain a road that I don't drive on - on a piece of property that I can't sell?  But yes, it does make me feel petty and unappreciative which is why I'm here looking for advice.  

  • Drool 1
Link to comment
Share on other sites

1 minute ago, BottleRocket said:

Will you give me $15k (just the tip) to maintain a road that I don't drive on - on a piece of property that I can't sell?  But yes, it does make me feel petty and unappreciative which is why I'm here looking for advice.  

Sounds like you need to find a reason to drive on it and use this incredible asset that your cost basis is 0 on. Just a drive by opinion and a funny observation of what people bitch about. 

  • Hook 'Em 1
Link to comment
Share on other sites

31 minutes ago, BottleRocket said:

We have a similar issue with my wife's family ranch.  My FIL gave his 500+ acre Hill Country ranch to his three daughters (one of which is my wife) - all undivided interests.  My FIL is still alive and actively ranching the land with around 100 cow/calf operation.   The ranch is complete with two houses, barns, and all the associated ranching infrastructure.  He gave the property to his girls in an estate planning effort to reduce inheritance taxes on the eventual date of his passing.  As the story usually goes, my wife does not get along with one of her sisters - at all!

My wife wouldn't mind being bought out by her sisters, but they can't afford it.  Her sisters have no intention to sell and want to pass the land down to the next generation.   That feels good but it doesn't pay the bills.  Our problem is that eventually the maintenance on this place is going to get expensive.  Wells, pumps, solar panels, roads, fences, barns, tractors, etc.  - all require upkeep and maintenance.   As an example, my sister-in-law recently got a quote for $40k for repairing and upgrading the access roads.  They own a neighboring property and have a vested interest in keeping the roads tip-top.  We don't.  Currently, my FIL handles all the ranch expenses with the cattle business.  But that can't last forever.  If we can't sell after my FIL passes away, it could be a big liability (financially for me).  There is a hunting lease that covers the property taxes but the rest will be 33% ours.  We seem stuck and I don't see a way out.  No doubt I'm missing something.  I keep suggesting that we grow pot, but that idea hasn't gotten legs yet with my wife's family. 

Draw up a legal plan for them to make payments to you over the next 30 years to purchase the land from you, with terms for if and when they don’t make their payments. 

If they can afford to run a ranch, they can afford to pay you something every month to buy you out over time. Make the default terms onerous so that if they keep defaulting your ownership keeps stepping back up. Eventually they will either go get a loan to buy you out completely or agree to sell the ranch. 

  • Hook 'Em 2
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.



×
×
  • Create New...