Below is a question we received from a fellow landowner asking for our opinion.
Our tree acres are limited; we have about 100 acres and wonder if my wife and I need to address them in our will. Our family has agreed to allow the oldest son to be the administrator of our estate. Do we have enough trees to consider them in the will? All were planted about 11 to 13 years ago. Thanks for your thoughts.
I heard a couple of great things in your question that are important. 1) Your family is talking about what happens when you pass away. 2) You and your wife are working on your wills.
As to your question about the 100 acres of forestland, I am not real sure if I understand the reason for the question. If you are working on wills that would presumably include your assets, then my first reaction is yes, I would include the timber acres. Depending on your total assets, a well thought-out and developed estate plan may be as important as, and go hand-in-hand with, a will.
Because your question asked specifically about the tree acres and a will, some of my thoughts are:
- What are you and your wife’s goals for the 100 acres? Have each of you written down your own goals and then the two of you compromised on the differing points so you can merge those into one list? Do you want the land to stay in the family for years to come? Are your plans to harvest or have the heirs harvest the timber or leave it as it is now? Does one or more of your heirs have an interest and desire to keep and manage the timberland? In order to know the answers to these questions, you need to talk to your heirs about what you are thinking about doing and get their input. Please do not make them hear what is in the will for the first time a few days after you are gone!
- If not all the heirs have an interest in keeping the timberland, how will you address its distribution in your will? Be sure to consider that fair and equal do not necessary have to mean the same thing in any distribution.
- If the 100 acres are important to everyone in the family, will you split it up among the heirs in your wills or do you want it left as a one piece? Do you want your heirs to have a piece of separate property of their own or one tract together and undivided?
- As good as your heirs are and as good a job as the oldest son will do with managing your affairs, if the tract is left undivided someone might balk at spending $15 – 30,000 to site prep, replant, and grass spray the 100 acres after it is final harvested. Or worse yet, someone might not even agree to sell the timber in the first place. Or even worse, one might sell their portion to an outsider because they need the money before the final harvest. An outsider involved would likely not be a good thing for the other heirs.
- If you divide it into individual tracts, how do you split it? The tract size might become so small that effective management may be difficult. If each tract is not on a road, how will access be provided to the tracts in the “back” of the property?
- Once these issues, and probably others specific to your family, have been resolved, then in my opinion you have the details needed to take to your attorney to begin development of the will. If none of those issues can be resolved to you and your wife’s satisfaction, then you might want to sell the timberland before you pass away to generate cash you and your wife could enjoy
Remember I mentioned an estate plan might be what you should consider in conjugation with your wills. A limited liability corporation or a family limited partnership might be considered to keep the land in the family with everyone sharing in its benefits according to their membership interest. Depending on your goals, you might consider dividing some of your assets in a will, and the others could be put in an LLC, trust, FLP, etc. You need to get a lawyer and / or CPA to assist you to make certain whatever you do will fit your goals.