Estate Planning for Ranch Owners 15 Estate Planning & Community Property Law Journal 2022-2023

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15 Est. Plan. & Cmty. Prop. L.J. 1 (2022-2023)
Estate Planning for Ranch Owners

handle is hein.journals/epcplj15 and id is 11 raw text is:

ESTATE PLANNING FOR RANCH OWNERS

Tanya E. Feinleib*

I. INITIAL CONSIDERATIONS ................................................................ 2
A. Legacy or Recreational Retreat ................................................ 2
1. L iquida tion ....................................................................... . 3
2. Multi-Generational Ownership ........................................... 4
3. Cemeteries on Private Property ......................................... 5
B. Liquidity and Cash Flow .......................................................... 5
1. Capital Calls for Ranch in FLP or LLC.............................. 5
2. Oil, Gas, and Other Energy Revenue .................................. 6
3. Liquidity for Ranch in Trust ................................................ 7
C . P rop erty Taxes .......................................................................... . 8
II. L IABILITY PROTECTION ....................................................................... 9
A . A gritourism A ct........................................................................ . 9
1. Obtaining Protection Under the Agritourism Act ............ 10
2. Limitations ofLiability Protection .................................... 10
B. Farm Animal Liability Act ...................................................... 11
C . L iability W aivers ...................................................................... 12
D. Texas Recreational Use Statute and Liability Insurance............ 12
E . FLP s and LL C s ........................................................................ 12
III. FAMILY LIMITED PARTNERSHIPS AND LIMITED LIABILITY
C O M PA N IE S .................................................................................... 13
A. Homestead Qualification ........................................................ 13
B. Marital Property Issues .......................................................... 13
C. Choice of Entity ..........................................................................14
1. Simp licity of LL Cs ............................................................. 14
2. Mineral Income and Choice of Entity ............................... 14
3. FLP with Non-Equity General Partner ............................. 15
D. Creation ofMultiple Entities ................................................. 15
1. Separation ofMinerals from Surface ............................... 15
2. Separation of Tracts for Distribution to Beneficiaries......... 16
3. Separation of Operations and Ownership......................... 16
IV . EX IT STRATEGIES ........................................................................... 17
A. Non-Pro Rata Estate Division and Equalizing Bequest .......... 18
B . A bility to P artition ................................................................. 19
1. Right to Partition Under Default Law ............................... 19
2. Partition During Lifetime or at Death ............................. 20

* Attorney & shareholder at Langley & Banack, Inc. J.D., University of Texas School of Law,
2011; B.A., Trinity University, 2008.

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