Tillman and Ora Anna Reed Jim's Mom and Dad

This was a crucial test for the Reed family, since we had read and heard of the many horror stories of family conflict, misunderstandings and miscommunications, and tales of close family members not speaking to one another for the rest of their lives. We already understood the possibility of close family members being forced into difficult and emotional decisions, which might have been best made by the deceased.

Both Jim and his brother agreed that it was best for this not to happen to them.

After most of the interest-bearing assets were separated out for the benefit of Ora Anna’s care and immediate income needs, work began on dividing the remainder of the assets into two parts–A and B.

Jim and Lary decided they would not stop their asset division work until they both felt that the A and B parts were equal; and that each would feel okay about receiving either part. They spent lots of time in this endeavor but, under the circumstances, they felt it was time well-spent.

After both Lary and Jim agreed that the appropriate level of equity was achieved in Part A and Part B, they flipped a nickel to see which brother would receive which set of assets. The ranch was part of one set of assets, and Jim received the ranch and other assets by virtue of the coin toss. We’ve had no regrets about how this degree of equity was achieved and, at this point in time, there’s been no family member that hasn’t felt that what Jim and Lary did was a fair and equitable way to settle the division of the estate assets.

Tillman Reed on Right in Photo Brothers Jack and Willie Sister Lizzie Granny Reed in Center Early 1940's Photo Taken At Reed Family Home Place

Since that coin toss, we’ve had the opportunity to experience Holistic Management and how it affects our happiness, peace of mind, and quality of life. We felt like it made sense to apply these same principles to the planning of our estate rather than rely on a coin toss the next time around.

What’s contained in this article is an explanation of the direction we’re heading. There has been no attempt to write this article in terms of what may be best for others, although you may find this article helpful in working through your own situation.







Key Points

Before we get into our specifics, here’s what we think is the best advice we can offer you in terms of your own estate planning:

- Estate planning is important for your own peace of mind and for the generations that follow. We owe it to the people coming after us!

- Your estate plan has to be customized to your own set of circumstances. Like ranches, everybody’s situation is different!

- It’s very important to keep up-to-date on your net worth. If you don’t know this, you’re flyin’ by the seat of your pants!

- GET A WILL, if you don’t have one. Or, make sure the one you have is UP-TO-DATE! The size of your estate doesn’t matter. There’s no excuse for not having a will!

- You should to be prepared to search hard for quality legal, tax, and financial planning advice. Just like finding good ranch hands, good estate planning help is hard to find!

James Lawrence and Lottie Cureton Reed (aka Granny Reed) James was thrown off horseback and died in 1911 Photo Taken In Early 1890's in Lancaster County, South Carolina Prior to Migration to Navarro County, Texas, in 1893.

Our Story

We were fortunate to find a financial planner (who’s also an attorney), who’s willing to listen and learn about Holistic Management, and also has sufficient background to understand how important it is to set goals for yourself. We’ve found that many attorneys and tax accountants don’t have sufficient background in goal setting and many don’t understand its importance. It’s also tough to find a good fee-based financial planner, whose livelihood isn’t based on selling you a product or investment.

The big disadvantage of many financial planners is that they may not have the sufficient depth of knowledge or credentials required to work through all the tax and legal implications of estate planning. So, to find good help, you may find yourself gathering a team to help out; instead of choosing a single individual.

Once we were able to find someone to help us, we developed a basic framework from which we can continue to tweak our estate plan as we see fit. That framework includes:

- A Will for both of us which creates bypass and marital trusts at either of our deaths. This is the strategy we’re using to eliminate or ease the blow of federal estate taxes if one of us should die.

- A special provision in our Will referencing special consideration for the ranch; its goals and Holistic Management principles. We hope that such focus will speak volumes to our kids and others about how a ranch can be run in a sustainable and profitable manner. If they’re smart (and our kids are), they’ll continue the tradition of managing the Reed Ranch holistically.

- Special treatment of our separate property (since there’s an extended family created by virtue of an earlier divorce). By the way, it’s important to know the laws within your own state or country as it can really influence the choices you make about your estate plan.

- The attachment of our holistic goal to our Wills, the support of Holistic Management and consensus building, and the use of the Holistic ManagementÒ testing questions to manage and resolve things. You can read our holistic goal at: http://www.reedfamilyranch.com/ranchgoals.html.

- The naming of a third party trustee at both of our deaths.

Most of the estate planning we’ve read about appears to be driven largely by the size of the estate to be settled and methods to avoid estate taxes. But we’ve planned ours to integrate Holistic Management into ours because it will help future generations to improve their lives and this land.

Four Generation of Reeds Jim, Son James, Ora Anna And Baby Kaylee

Estate Taxes

Federal estate tax can be mean and ugly! If not planned properly, estate taxes can take so much value from the estate that the kids will have to sell any property because they can’t afford the taxes. Of course, there are special provisions for a family-owned business deduction, so be sure to ask your tax and accounting expert about this very important provision. Again, the key is to plan so the most money can go to the people you want it to go to. Sure, there are lots of things beyond your control, and that’s all the more reason for planning what is in your control. So here’s some other things to consider:

- You may not be a millionaire now, but just think how much your ranch may be valued at in the future. It’s important to plan both for what’s now and for what’s in the future.

- Unless you have an up-to-date net worth statement, you may be worth more than you think you are.

- You don’t know who’s going to be in control the government at the time of your death or how badly they will want or need your money, so it’s best not to count on any government policies that might encourage you not to do your planning (i.e. potential repeal of estate taxes).

We found out that you don’t have to be a millionaire to be able to take the opportunities that’s afforded by doing good estate planning with all the family included. It’s our belief that, if you work hard enough and are committed to it, there’s ways to have your cake and eat it, too.

Maximizing Your Estate

By planning ahead, you may be able to:

1) Pass on your estate free of all federal estate taxes
2) Support the ranch being holistically managed in the future
3) Have little to no family conflict in settling your estate
4) Keep your property from being sold or divided to settle your estate

Jim and Judy Reed With Son Jimmy

We recognize that there are many other ways to look at an estate plan and how it can be influenced by Holistic Management. To us, merely passing things down through the use of a Will, without any regard to what our heirs will have to pay in estate taxes seems kind of unfair to the kids (especially if federal estate taxes can be avoided with a little bit of work and things are kept neat and tidy before they’re passed down).

We also wanted to make the execution of the estate as easy as possible emotionally, which is why it’s really important to pick the right executor or trustee if you are setting up a trust like we did. This is the person that pretty much calls the shots and his/her responsibilities are spelled out in the Will. These are listed underneath a section in our Wills called “trustee title, powers, duties, immunities, and discretions.”

At this time, none of our children are named as trustees. Although both of us are named as each other’s trustee in the case of each of our individual death, our trusted friend and financial planner/attorney is named as the alternate trustee and the eventual trustee in the case of both our deaths.

Daughter Traci Family Jimmy K. with Children Hagen and Anna

As each of our children mature and develop their own lifestyles and interests in the future, this method of trustee naming may eventually change if it becomes apparent a change is needed.

In other words, in consideration of our own particular situation for family peace and cooperation, we feel it’s best for the presumption to be that a third party (other than a family member) be named as the trustee, unless it becomes readily apparent that a single family member can be named, and there’s a level of confidence that peace and cooperation can be maintained.

The more you can spell things out in this section the easier it is on everyone. For example, here’s what we put in our Wills regarding the desire for the ranch property to be managed holistically:

“If agriculture ranch property is contained within any or all of the trusts named herein, the trustee of the trust(s) shall recognize the influence of the Holistic Management principals as promulgated by the Allan Savory Center for Holistic Management, and shall give due consideration to the ranch(s) holistic goal (attached herein). More specifically, the use of consensus building techniques (led by a Certified Holistic Educator), and the use of the seven testing guidelines (as documented by the Allan Savory Center for Holistic Management) shall be an integral portion of the management of any ranch(s) contained in the trust(s) named herein.”

Working for the Future Now

Lastly, we believe that an integral part of estate planning has to include some meaningful financial planning for the on-going operation of the ranch; and sticking to it. For us to keep the ranch in the family and for it to be something worthwhile in the future, it has to be both financially and operationally sustainable.

This means holistic financial planning in a responsible manner; in a way that suits our needs. More specifically for us, this means limiting our expenses to half of the ranch’s income (or planning 50 percent profit )and operating the ranch with little or no equipment. One of the most important things we’ll do in 2003 is to fulfill our current ranch motto of “equipment free by the end of 2003.” In doing so, we are better able to hit our 50 percent profit objective and add to the health of the land base.

For several years now, we’ve been posting all our income and expenses (both ranch and personal) in Quicken and running net worth and income/expense reports on a monthly basis so we can assess our estate on an ongoing basis.

We hope you found this article worthwhile and that it may be helpful to somebody. Holistic Management has helped us achieve what we want now and we are working to make sure it continues to help the Reed Ranch for generations to come.

Jim and Judy Reed own and operate Reed Wildlife Ranch in Corsicana, Texas. They can be reached at: oljim@reedfamilyranch.com and msjudy@reedfamilyranch.com .