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Index
of Articles
Facilitating a Plan for a Family
Land
by Olivia Boyce-Abel
Published in Land Trust Alliance Exchange, Fall
1998
"Longshadows," a 3,000-acre, $10 million coastal plantation in the
Southeast, provided a vacation home for Mr. and Mrs. "Wallace,"
three of their children, spouses, and 12 grandchildren.
Mr. and Mrs. Wallace, ages 78 and 82, wanted to preserve the land
and maintain family harmony as they passed the property on to the
next generation. One child lived in London, one in Montana, one
in New York City. One lived on and operated the family's 1,000-acre
farm at Longshadows. All the children had strong emotional ties
to the property.
The Issues
- The parents weren't totally ready to cede control
of their money, property and farming business. They were particularly
worried about providing for their retirement and health care needs.
- The children were apprehensive about changes to
the land.
- Three children needed future liquidity; one did
not.
- The three children who did not live there wanted
vacation homes on the land.
- The son who farmed there wanted to continue both
farming and living there with his family. He was also concerned
about the ownership of the farming business.
- The family wanted to minimize its estate, income
and gift taxes. The parents were jointly allowed to gift up to
$1.2 million in their lifetimes plus $20,000 per year to each
child, spouse, and grandchild without having to pay taxes on their
gifts.
The Professional Facilitator:
The Wallace family reached a clear and workable consensus by using
a professional facilitator to:
1. Conduct quarterly family meetings over one year to focus discussion,
brainstorm a wide spectrum of opportunities, and bring the family
to satisfactory choices and closure.
2. See that all parties met with financial and estate planners and
appraisers as well as land trust representatives and other professionals
when appropriate.
3. Meet individually with participants so they could air emotional
concerns.
4. Help the family deal with practical problems such as liquidity
needs, inheritance taxes, property taxes, maintenance and upkeep,
health care for the parents, the family farm business and other equity
issues for the children.
5. Establish a workable governance structure that was acceptable to
everyone. This includes addressing such questions as:
- How will decisions about jointly owned land be
handled (for example, by majority owner, committee or consensus)?
- Is there a mechanism for family members to buy
one another out? (If for instance, the Wallace's grandchildren
or great-grandchildren want their liquidity, are there funds set
up for purchasing their part so there will not be a partition
suit?)
6. Deal with emotional issues among family members and their spouses
such as:
- lack of trust creating barriers to open dialogue.
- parents' fear of death and loss of control.
- children's nostalgia for the land to be preserved
as it was in their childhood.
- different viewpoints about equitable division of
property.
- the need for guidance and leadership to maintain
focus and momentum.
- the need for encouragement to both explore and
continue moving to closure.
- personal fears of change, not having enough, reopening
old wounds, being minimized, loss of love.
The Plan:
1. With the help of the facilitator, the Wallace family set up a mission
statement and governance structure.
2. They agreed to place the 1,000 acres of farmland in agricultural
easement which the farming son would own along with his home and the
family farm business. That was the extent of his inheritance.
3. The remaining property was divided for the benefit of the three
other children, their families, and grandchildren into:
- A 500-acre tract set aside as the family compound
including the existing vacation home. The tract consisted of three
separate parcels (approximately 166 acres each) with a house site
for each child, under conservation easement.
- Another 500-acre tract was in joint ownership and
under conservation easements permitting timber harvest and providing
for financial liquidity.
- The final 1,000 acres was set aside as a limited
conservation development to provide future financial liquidity
in a manner the family feels proudly carries on their legacy:
A conservation easement was donated to a local land trust on 500
acres. On the reamaining 500 acres, the family allowed for 175
houses, on parcels of approximately 2.8 acres, each house having
a 200-foot set back from the road and adjacent parcel lines and
a winding driveway so no house would be visible from the road.
No removal of vegetation was allowed within the setbacks.
4. The parents decided to gift $1.2 million between them among their
children and grandchildren. They determined the order of gifts/recipients
by financial advantage. After meeting with financial planners and
estate attorneys, they may give more and pay the gift tax if that
is preferable to the estate tax they would pay if they waited until
their deaths. They may establish a trust or utilize other financially
advantageous methods.
5. The parents decided to jointly begin annually gifting $20,000 per
child and grandchild.
6. The children agreed to share financial responsibility for their
parents' health and retirement care and to compensate their brother
in his role as on-site caregiver as necessary.
Not every family with land holdings needs all the skills a professional
facilitator can provide, but nearly all need some help to conserve
or rebuild family unity. A facilitator helps ease the way while resolving
complex family differences around emotionally charged issues of inheritance
of family lands. )
Olivia
Boyce-Abel is founder of Family Lands
Consulting, through which she works in negotiating effective environmental
agreements, dispute resolution and family mediation. She has over
20 years personal involvement in multiparty ownership, including more
than nine years of litigation as trustee, executrix, and trust beneficiary.
The Land Trust Alliance has several resources for landowners available,
including Conservation Options: A guide for Landowners and Preserving
Family Lands, by Stephen Small. LTA also can put landowners in touch
with land trusts in their area.
__________________________
1. A legal clause used in wills that states that if
anyone contests the will, he immediately forfeits his inheritance.
It has not been upheld in court in most states.
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