Insurance and Finance

Who Will Inherit Your Land? Here’s How to Make Sure

By Alex Macon 9.24.20

If you’re a property owner, your land is part of the legacy you’ll leave when you’re gone. To protect that legacy, it’s important to take the appropriate steps now.

Texas does not impose an estate or inheritance tax. However, if you die without a will, things can still get complicated. Depending on whether you’re single or married, how many children you have, and whether your property was purchased before or after your marriage, your land could be divided in any number of ways.

For that reason, and because land inheritance and the transference of land is largely a legal issue, your first step should be to consult an attorney and draw up a will. That way, you control who will inherit your land. But you also need the right insurance in order to truly protect your legacy.

Structuring Ownership of Your Property

Your attorney will be able to provide legal advice on the best way to structure your ownership of the property, whether it’s as a sole proprietorship, an LLC, or something else. There is no one-size-fits-all approach. “It’s really all based off of [a given] scenario,” says Steve Hartgrove, a Texas Farm Bureau Insurance agency manager in Houston. “It’s who you are, what your asset value is, how successful have you or your heirs become.”

How Insurance Protects Your Land

Where an insurance Agent comes in, Hartgrove says, is in helping you determine how much liability insurance you need to protect your interests. And if you have multiple pieces of land, your insurance needs may change depending on whether each piece of property is registered to its own LLC or owned as a conglomerate.

What Insurance Your Heirs Need

If you plan to distribute your property among multiple heirs, each of those heirs will most likely need to take out liability policies once the estate is probated. Hartgrove gives the hypothetical of two sons set to inherit 20 acres of land from their late father. If the brothers own the 20 acres in common, they’ll either need to be comingled on one policy or each take out policies on all 20 acres. If they split the acreage, each brother will need liability insurance on their respective 10 acres. “And if there’s five kids involved, every one of them needs to endorse this property because each of them could be sued individually, not collectively.”

In other words, it’s best to clean up your estate and make arrangements ahead of time. “Land owners need to have somebody on the insurance side as well as on the legal side working in tandem to protect their interests,” Hartgrove says.

Want to learn more about protecting your land for future generations? Talk to your Texas Farm Bureau Insurance Agent.

© 2020 Texas Farm Bureau Insurance