‘They should have their butts kicked’: This Oregon woman wants to divide her late mother’s ranch evenly with her siblings — but they put money into it and she didn’t. Dave Ramsey responds
Just 46% of Americans aged 55 and over have a will or other estate planning document, according to senior living referral service Caring.com. But even the presence of one doesn’t mean all problems are avoidable.
A recent caller on the The Ramsey Show, Sheryl from Medford, Oregon, said her mother passed away recently, leaving a trust for her farm. But though the siblings (Sheryl, her sister and brother) were to divide the estate equally, the ensuing situation has led to family discord.
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“They should have their butts kicked in for not doing this properly,” Ramsey responded. Here’s why the situation upset him.
The situation
Sheryl is in her late 60s and happily married. When her mother passed, she left behind an estate Sheryl claims is worth $2.2 million. The farm property is held in a trust, according to which the assets are to be split evenly between Sherly, her brother and sister.
However, Sheryl’s siblings have invested in the property, adding some buildings over time. And that’s created disagreement about a fair split. “How is that [equal split] fair if they put money into it and you didn’t?” Ramsey asked her.
He said he believes the siblings and mother should have outlined specific terms about how the estate would be divided, given the fact that some have contributed more than others. “Let me tell you, the whole idea that they would build a building on someone else’s property without having everything lined out in the trust in detail was pretty stupid because it sets up a big argument,” he contended.
A lack of estate planning is pervasive. As of 2023, only 34% of all Americans had a will, according to Caring.com’s 2023 Wills and Estate Planning Study. About 40% of the remainder without a will said that a medical diagnosis would encourage them to make an estate plan, but roughly one in four said “nothing would motivate” them to do so.
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Sheryl’s situation highlights how even having a will and trust fund can still lead to disputes between family members. Ramsey suggested a few solutions.
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The solution
Ramsey believes the trustee (Sheryl’s brother) is legally mandated to follow the trust terms and split the assets evenly. However, trusts are complex structures and the level of flexibility a trustee has depends on the trust’s terms and state laws.
Nevertheless, Ramsey believes the siblings could come to a mutual agreement on a split that they would accept as fairer. For instance, they could separate the fair value of the properties built by the siblings over the years and then split the leftover value equally.
Ramsey said this would be the “ethical” solution.
All adults should have a will
Then there is the general question of who should write a will. “if you’re 18 years old or older you need a will, period!” Ramsey said. “It’s what grown-ups do, and by the way, the government’s going to end up with a bunch of this, too, if you don’t.”
Depending on the size of the estate, beneficiaries might owe estate taxes on a state or federal level. A formal plan could potentially minimize this tax liability.
You can also minimize liability and confusion by updating the will everytime there’s a major life event. Sheryl’s family, according to Ramsey, should have revised the trust when the siblings invested in the property with new additions.
In fact, the Ramsey team and his family get together every year for a meeting titled “If Dave Dies This Year.”
“We sit and talk about my death for an hour and a half,” he said, “[and about] what has changed since last year in the operation of Ramsey.”
Ramsey’s net worth is estimated at $200 million with a reported $150 million in real estate, according to TheStreet. Given that kind of nine-figure wealth, an annual succession planning session isn’t just pertinent; it could prove the best path to avoid the kind of infighting Sheryl’s family has dealt with since losing their mother.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.