If the siblings, against all odds, are able to agree they want to keep the farm, they will need to figure out how to co-own it.

Q: My mother is 94 years old, and she has 12 children. Her will leaves her farm in Texas in equal shares to each of us. The farm produces income. One sibling has suggested that an LLC be created to manage the farm. Are there any benefits or limitations we need to be concerned about, and why would we want an LLC?

A: It is highly unlikely that all 12 of you will be able to agree on much of anything related to the farm. At least that is my experience when so many people inherit a single piece of real estate.

One or more will no doubt much prefer to receive cash rather than a small, undivided interest in a farm. It is possible that one or more siblings will be in a position to purchase the share of a sibling who wants to sell, but with so many owners, the sibling who buys out another sibling will still be left with a minority interest. Therefore, unless one or more siblings are wealthy enough to make the purchase without regard for how bad a business decision it would be, no such purchase will likely occur.

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Also, one or more of the 12 may no longer be living when your mother passes away. If your mother's will is written like most wills, it will leave the share of a deceased child to that child's children, and that would mean even more owners. There may be 15 or 20 owners who inherit the farm when your mother passes away.

Even if the siblings are all alive, as soon as they start passing away, the surviving siblings will find themselves with more and more co-owners.

Texas has a statute that deals with situations just like this. It is called the Uniform Partition of Heirs' Property Act and is in Section 23A.001 of the Texas Property Code. You can find it on the internet. Disagreements are so common when two or more people inherit a farm (or other real estate) that there is now a complicated statute that attempts to help resolve problems quickly and cheaply.

If you and your siblings are somehow, against all odds, able to agree that all of you want to keep the farm, then you will need to figure out how you want to co-own it.

One way would be for each of you to own your interest in your individual name. Another way would be to create an entity such as an LLC. Creating a business entity is definitely more complicated, and it will require an attorney to create it and an accountant to prepare the annual tax returns, but it would offer more protection from personal liability for each individual owner.

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You can search the internet for the other advantages and disadvantages of creating an LLC. I could discuss it in more detail, but I really doubt the 12 of you (or possibly the 20 or even more of you) will be able to agree on what you all want to do.

The information in this column is intended to provide a general understanding of the law, not legal advice. Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to: stateyourcase@lipmanpc.com.

QOSHE - 12 siblings, one farm: What's the best way to handle inherited property? - Ronald Lipman
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12 siblings, one farm: What's the best way to handle inherited property?

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26.03.2024

If the siblings, against all odds, are able to agree they want to keep the farm, they will need to figure out how to co-own it.

Q: My mother is 94 years old, and she has 12 children. Her will leaves her farm in Texas in equal shares to each of us. The farm produces income. One sibling has suggested that an LLC be created to manage the farm. Are there any benefits or limitations we need to be concerned about, and why would we want an LLC?

A: It is highly unlikely that all 12 of you will be able to agree on much of anything related to the farm. At least that is my experience when so many people inherit a single piece of real estate.

One or more will no doubt much prefer to receive cash rather than a small, undivided interest in a farm. It is possible that one or more siblings will be in........

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