Estate Update – Ann Halstead May, 2007

To read this, please have the January 2007 update beside you to refer back to.

5.) Has been amended to read as two possibilities: an agreement for sale may be drawn up to sell Megan and Chris Hancock additional land.
OR
All four proposed lots may be sold and the proceeds divided as the probate stipulates.
6.) has been amended to read: Ultimately, the intention is to subdivide (within the ALR, changing the lot lines) which will entail keeping four lots, but redrawing the boundaries to describe the farm as one large lot then three smaller ones, approximately 97, 19, 19 and 19 acres.

A brief meeting with the accountant, Janice Thorburn, was held in which she suggested a roll over of Shani’s property to another family member until sale or other arrangement is made. This would be advantageous in view of the non-resident withholding taxation. In the long run, Shani would be fully compensated for her share of the estate.

I met with Lisa Gallo, of the Comox Strathcona Regional District, who confirms that our property is a “permissible subdivision”, not subject to the ALC’s jurisdiction.

John Mais, my brother, is coming to the farm on June 5th to assist in surveying the property.

I have met with Ms. Lynn McGee, public health officer, in charge of percolation regulations in subdivision planning, who will be advising me as to procedures for the subdivision environmental health regulations.

The existing sewage runoff system will need to be repaired. There is also work being done by the present tenant on farm and garden fences.

The subdivision costs are now estimated as somewhere between $20-30 000.

I have authorized David Green, the woodlot manager to proceed with harvesting mostly in Lot 2, where there is pine and hemlock now marketable at a much better rate than Dave and I have ever seen, whereas the market price for fir is down, except for poles. The proceeds should go a long way towards defraying the cost of the subdivision.

I have met with Shani, who has the following concerns:

  1. Megan should pay the market price for the property – structured like a normal mortgage, including down payment.
  2. In statement 5.) above, the whole family is making sacrifices to kiss their share of the property goodbye. The only person who stands to profit from the future sale of the property is Megan.
  3. If Chris and Megan get the proposed 97 acres plus the house, what happens should their marriage end? What if they sell? The property value is appraised at $1,154,600, which should be the basis of the mortgage value.
  4. There should be a clause written up in which each of the beneficiaries benefits if the farm is sold subsequent to the stage proposed now.
  5. Mom shouldn’t get stung in this i.e. she will not be getting the profit from selling her share as the deal with Megan may not be anywhere close to what she would get from selling to another party.
  6. I would be happy for Megan to live on the farm, but not own it. She can profit from the land but not the sale of it unless she pays for it.
  7. Margo Rutherford’s proposal about the estate selling all four lots to Megan would be fair, but not feasible as Megan could not pay for numerous years.
  8. If the terms of the sale to Megan are so lenient that I could afford them, then why shouldn’t I own the farm? Megan could lease it from me and run it. Or we could jointly own it.

My action plan now will be to proceed with the subdivision as proposed above. The subdivision application will be submitted to the B.C. Ministry of Transportation. I will seek input from you about the details of this report. I see no reason why Megan and Chris should not move to the farm as planned and remain there pending further decisions and developments. I require Shani to reply, giving her decision by June 30, 2007 concerning 8) above. Her reply should give a yes or no with a draft offer about buying or jointly buying the “farm”, i.e. what will be the Farm after the subdivision. Megan and Chris are also required to produce a draft offer to buy the Farm by June 30th 2007. I undertake to consider these offers and bring updates about them to the next family meeting.

I propose a family meeting for the 18th August 2007.

Chris and Eric please reply, giving me your thoughts about this update by June 8th by email or snail mail.