Several questions posed to me during the summer highlight legal problems families encounter. Using common sense, these problems can be solved affordably.
Homeplace blues
A recurring problem concerns the old homeplace that was owned by your parents and grandparents, and even generations before. The land has been passed down over the years, with one or two of the heirs living on the property or farming it, or both.
After the last one to live at or to farm the homeplace dies, the question becomes: How will the remaining heirs, who generally do not live in the area any longer, sell the property?
Often, because of multiple generations in large families, the number of heirs who own a small piece of a homeplace can be high. Locating and getting some of them to respond in order to handle a situation can be tough.
It is going to be expensive, legally, to straighten this out, and it might require litigation to do so.
Most of these problems could be avoided if the parents or grandparents had prepared a will and set out some orderly method of passing on the property. This includes letting the heirs who are going to stay on the property or use it, buy the land from the other heirs.
Having fewer owners who live closer to the land makes inheritance of the property much easier to deal with.
Recently, I consulted with a family who had multiple owners of the family farm. None of the previous owners had a will. There were three generations who owned some portion of the property.
Some children and grandchildren with children had died, which further complicated the matter.
Some of the deceased heirs had died in a common weather catastrophe, and there were questions about who died first.
No one can anticipate a weather calamity, of course. But if the previous owners had planned out an orderly method of distributing the property, the problems likely could have been avoided.
Property-access issues
A variation of this dilemma is a tract that has been divided among the children.
One or more of the tracts does not have direct access to a public road, and heirs on those tracts pass through another's tract to reach their property.
That often works well when all are family members and everyone is in agreement.
But when the ownership changes hands, that informal process might not work.
Part of one's estate planning should involve setting up written and recorded easements so that the tracts which do not have direct access are protected.
If Sibling One, who owns the tract that Sibling Two passes through, sells his tract, the second sibling will have a document that provides access to his property no matter what the new owner says.
Lending money to kin
Another fairly common family legal problem involves lending money to a relative and spouse to make improvements to their home. Now the couple is getting divorced. How does the family member who lent the money get paid?
Fortunately, the couple had secured that debt by signing a deed of trust (mortgage). Assuming sufficient equity in the property, the lending relative should be protected.
Planning in this case means the debt will almost certainly be repaid in full.
The lesson from all three of these situations is clear. Address potential issues before they become real and expensive problems.
Remember: An informed choice is a smart choice.
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