Use Trust To Keep Property In The Family For Children and Grandchildren

I met with recently with a woman who owned quite a bit of acreage near Jennings, Louisiana. It was important to her that the property stay in the family for at least the next couple of generations. She was in her early 80's, and she did not want one of the seven children to be able to sell of the property after she died. She stated that the children and grandchildren all enjoyed hunting, fishing, and spending time on the property.

She discussed whether it would be appropriate to get the property surveyed so that the big piece of property could be divided up into seven smaller tracts - one for each child. But she and some of her children were concerned that the family could never agree on which child should get which tract - but they felt that given some time, the kids could come to an agreement regarding who would get each tract.

On top of that, the woman was concerned that if she went into the nursing home, she would be forced to sell the property and use all of the money on her nursing home expenses. She realized that if she gave the property outright to her kids, that the kids would get a "carry-over basis" in the property causing there to be considerable taxes to be paid when the property would be disposed of in the future.

The woman ultimately came to the conclusion that it would be best for her to put that property in a trust now. The trust would be initially for her seven children, and it would continue to exist after the woman died. By setting up the right kind of trust, the woman will not be forced to sell the property if she goes in a nursing home in the future. Also, by setting up the right kind of trust, the family will enjoy the benefits of a step-up in basis when the woman dies.

The woman has one child in particular that the woman know will carry out the woman's intentions after the woman dies. This child, a son, will be named the Successor Trustee of the trust to handle matters after the woman dies. The child will have the ability to keep the property in tact, preventing a child from demanding their share, or the son could allocate tracts to each of the seven children in the event they all come to an agreement regarding who should get which tract.

Many parents and grandparents own land and they wish to keep the land in the family for use and enjoyment by children, grandchildren, or others. Louisiana and federal law limit your ability to do certain things. Anything you establish may have to comply the right way with property law, trust law, tax law, Long Term Care Medicaid law, and inheritance law. Make sure you work with the right person - and get it done right the first time - so that you keep the property in the family the right way for enjoyment by your descendants and other loved ones.