Although Southern Humboldt resident Elizabeth Marshall Maybee has worked on and tended to her home -- her grandmother's ranch -- for the last six years, she cannot own it -- yet.
After her grandmother's death in 2005, Maybee moved to the ranch to care for the property owned by her family since 1880, but she could not afford the estate tax -- also known as a death tax -- and the land remains in limbo.
”I know there's been a lot of energy into building and the sustaining of this ranch, and I want to honor my family and honor the time and the livelihoods that have been invested so far,” she said.
Maybee's story is a common one among farmers, ranchers and foresters who want to pass on their land to their heirs but find the tax a daunting obstacle. In order to equip families for such a transfer, the University of California Cooperative Extension is holding a series of statewide workshops titled “Ties to the Land” which focus on succession planning. Humboldt's workshops are being held on Wednesday in Garberville and Thursday in Eureka. The cost is $25 per family, and the sessions run from 6 p.m. to 8 p.m. Multiple family members are encouraged to attend.
Jim Able, of Able Forestry Consultants, said the estate tax, which is an appraisal done on the property after a death, accounts for appreciation of the land, but at a fair market value that treats the land as a developable piece of property. Able said that price often does not equate with the revenue of a working ranch or timberland, and families often end up selling the property to pay the tax.
”It's very difficult to pass it from one generation to the next, and that is a real problem. It's an emotional problem with one generation to the next. It's a financial problem. It's a legal problem, and it's very discouraging,” he said.
Maybee, a member of conservancy nonprofit The Buckeye and the Forest Landowners of California, said a workshop like the one the extension is offering would have helped her family get the conversation started earlier, which might have helped her avoid the financial uncertainty she faces now. Additionally, the workshop allows families to meet other families who are going through the same process.
”It will give an idea of what mistakes have happened and what successes we have, so we can learn from one another,” she said.
According to the U.C. Cooperative Extension, the examples from the workshop will come mostly from family forests, but the information is appropriate to many other family agricultural businesses.
”Family forests create many benefits through their stewardship actions, but the legacy can fall prey to the confusing details of land titles, permits, and inheritance if families have not crafted a succession plan,” said Bill Stewart, U.C. Cooperative Extension forestry specialist and organizer of the series. “This is especially true for owners who do not live in the county where their forest is. Their heirs have probably spent little time on the land, and the lack of shared goals can become a problem.”
Communication among family members is a key message in the workshops.
Able said communication, and a willingness to plan for death, is the difficulty.
”It's great that they're putting on this workshop. I've been to lots of them, and they do get people thinking and talking,” he said. “I think it's just a hard topic for people to own up to, and I've seen some of our clients that passed away -- I don't think they expected to see what happened to their property happen.”
The first round of workshops is being held before the holidays to allow time for families to get together during the winter holidays and discuss their goals.
During the first workshop, participants will learn the steps needed to plan for passing land along to their heirs. Participants will also learn about the financial impacts of ownership transfers across generations.
A second workshop will be held after the holidays and will cover the financial and legal approaches and tools such as trusts, limited liability companies, and easements used in succession planning, as well as specific planning approaches used to manage land and resources. Dates and times of the second workshop will be announced later.
”It's already hard enough for a family when they lose their loved ones and you can't do anything about that, that's the inevitable thing that happens,” Maybee said. “But what you can do is make plans together that sets up a legacy that will ensure that even though your loved one passes on, their legacy is one that is received by the next generation in such a way that is good for the whole community.”
To register for the workshop or for more information on other workshop locations, visit http://ucanr.org/tiestotheland or call 445-7351. Donna Tam can be reached at 441-0532 or dtam@times-standard.com.