RA Brown Ranch looks at estate planning through meetings, communication, proactive work

“It’s more than one piece of ground because we’ve grown with each generation, and I think that’s important,” said rancher Donnell Brown with the RA Brown Ranch in Throckmorton, Texas.

Donnell Brown, his wife Kelli and their oldest son Tucker gave a presentation for the Young Beef Leaders Program on their family’s experience with bridging the generational gap in ranching families.

Background

The Brown family has been ranching since 1895, raising registered Quarter horses and both registered and commercial cattle.

“Kelli and I are the fifth generation to own the RA Brown Ranch,” said Brown.

The Browns are passionate about the cattle industry and have always emphasized the importance of family in their family business.

Brown illustrated that point with a story about his grandfather.

“One of the things they had to do when they fell on hard financial times is that all of my grandfather’s sisters ended up deeding their parts of the ranch to my grandfather to get enough collateral to get a loan,” he explained. “The family is above all, and at the end of that time, he deeded all of that land back in equal parts.”

Past example

“I’m confident that our ranch is where it is today because my dad received his father’s blessing, and I believe that’s very important as we go from generation to generation,” said Brown.

Despite differing opinions on management practices for the ranch, Brown noted that his father received their grandfather’s blessing on taking over the management of the ranch before he passed away was pivotal.

“That’s not to say that we have to agree on everything that we’re doing or going do, but I do believe it’s important to share our blessings with our children,” Brown stated.

He commented that the earlier generations also found it important that the ranch was owned by multiple generations.

“One of the neat things that my great-grandparents did is they deeded the ranch to three generations. My grandfather and my dad never actually owned the ranch. They had a working, lifetime estate in the ranch,” Brown explained.

Estate planning

Brown said that his parents began estate planning 30 years ago and put the ranch into a limited family partnership.

“The four of us in my generation actually owned a huge portion of the ranch for 27 years, even though Mom and Dad were the presidents of the company,” he explained.

The four siblings allowed their parents to make all of the calls and submitted that leadership to them.

“We signed a document every year stating that we would not take money out of the ranch, and that was an agreement we all made in the beginning,” noted Brown.

The reason for that was to prevent the loss of half of the ranch in estate taxes, commonly referred to as the death tax.

Brown advised that families consider the estate tax and discuss their options with a knowledgeable source.

“They did that by finding council and finding an accountant who knew the laws. I encourage others to do that with their families,” he commented. “Get somebody who knows more about estate planning and say, ‘What are some things that we can do to keep our ranch in the family and our family in the ranch?’”

Recent transition

“Mom and Dad’s goal when they came to us three years ago was to keep the ranch in the family and the family in the ranch,” said Brown.

With the limited family partnership, each of the four siblings had an undivided 20 percent interest in the ranch.

“When they said that, my first thought was that we were going to get out a map and draw lines to eventually see who will get what, but it was very different,” he explained.

His parents charged the siblings with meeting together and deciding how they would like for the ranch to be divided and said that they would be there if the siblings needed them.

“We set aside one day a month. We started every meeting with a prayer, and then began deciding what the value was of the ranch,” Brown explained.

The meetings consisted of just the four siblings without their spouses in the beginning.

“I think that was helpful because it’s easier to work with and understand where someone is coming from when we’ve grown up under the same roof with the same rules,” noted Brown.

The family decided that the fairest way of dividing the ranch was to break it into blocks of equal value.

“It wasn’t always equal acreage, but equal value to the acreage, which included the homes, facilities and so forth,” he said.

The siblings elected to not use an appraiser when determining property and facility values.

“We didn’t hire an appraiser to do that – not saying that it wouldn’t be a good idea – but we were able to work through that situation fine and agreed to values,” continued Brown. “We agreed it would be four equal values to break up the ranch into four equal parts, with the assumption that any of us would be happy with any of the four parts of the ranch.“

The Brown family has seen many family businesses suffer greatly because lack of estate planning resulted in severe consequences with the death tax.

“We encourage ranchers to be proactive in dividing things up,” concludes Brown.

Emilee Gibb is editor of Wyoming Livestock Roundup and can be reached at emilee@wylr.net.