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Other than the branding application form, did the owners have any written agreement as to ownership?
no, would it be good to have some kind of written agreement as to ownership and survival ownership in case of death?
Yes absolutely. Without a written agreement you may have a partnership that is subject to the default partnership rules. Under section 48-1-4 a partnership is created when a person receives a share of the profits of a business (generally courts have also interpreted that a partner should also share in the losses as well). So if the cattle was purchased together and there is an expectation of profit then you would have a de-facto partnership. In the unfortunate case that a partner passes away the partnership would then automatically dissolve the would be wound up (meaning that that debts of the partnership would have to be settled and its property distributed to the (former) partners and the deceased partner's estate. In effect this means that unless the cattle is sold and the proceeds are divided the remaining former partners would have to buy out the estate and they the they may continue to do business as a new partnership.
Therefore, you should consider entering into a written agreement as to the ownership of the cattle (not withstanding the branding application) or consider forming an LLC that would be the owner of the cattle and the partners will be members of the LLC. The LLC would have an operating agreement that will set out the rights and responsibilities of each member
(BTW, if you go the LLC route you would either need to amend the existing application or create a new branding application)
seem to have lost my response so will try again, ok, but if there are three people on the brand, as an example, any one of them can legally sell cattle with that brand, so any one of the three can sell any cattle with that brand whether the other two are living or dead, and have the proceeds, unless their right to do so is challenged, after the fact, by one of the other two. Am I wrong in this reasoning and if so how and why?
could a written agreement be written in utah as to the cattle being owned as an undivided ownership with right of ownership to the surviving owners in case of death?
If the partners did not agree in advance how management decisions of the partnership will be handled then all partners have equal rights in the management and conduct of the partnership. Therefore a partner can cause the sale of the cattle but the proceeds will be divided between the partners. This of course opens the door to some questionable behavior by partner who may choose to sell partnership property for some personal benefit. In such a case the partner will be personally liable for his/her actions.
upon death of one of the partners the partnership dissolves automatically and it will be up to the new partners (maybe the heirs) to form a new partnership. In addition, you cannot force anyone to form a partnership. So as per your question, you can specifically assign a partner's economic interest to the a certain person upon the death of the partner but all it means is that the assignee will have an economic interest in the cattle. As noted above, in the event of a dissolution the cattle will either need to be sold or the remaining partners can choose to get together and form a new partnership and buy out the assignee. You would not be able to force the remaining partners to form a partnership with the assignee. This type of an arrangement is better done through an LLC.
so you are saying that having three names on a brand recording automatically creates a partnership of the three people, in what respect, I know of brothers who have 2 or 3 names on the same brand but operate their cattle independently and have no partnership taxwise or other wise, in a case of that kind, if one brother dies could not the surviving brothers sell his cattle and disperse the proceeds as they saw fit unless someone legally protested, assuming all the cattle were branded the same? Or who can say how many cattle either person owns under that brand, as long as the people on the brand, or their heirs possibly, have no disagreement as to the ownership or the right to sell?
Maybe I was not clear enough, so apologies. Having three names on a brand with the intention of sharing profits and not having any other documents in place (such as some form of an agreement, title to cattle etc.) then a partnership would likely be created. If all parties (partners) agree to do something and actually do it then no problems and in such case it doesn't matter what you call it. If, however, things are not done the way they were supposed to then either follow any written agreements that exist or the default partnership rules. I always recommend to have a written agreement. Why rely on the state to write your agreement for you (in the form of the default rules)?
If title to cattle exists in the name of a person (or if the other partners acknowledge that this is person X's cattle) and if a partnership is deemed to exist as well then generally upon distribution of profits person X is generally first paid back the value of the cattle from the time person X brought the cattle to the partnership and any excesses are divided as profits among the partners. The partnership would own any new cattle that did not have a prior owner.
so if the partners are in agreement as to whose cattle are whose and who can sell what cattle, the irs or some government agency is not going to come in and challenge the selling of cattle or the income therefrom?
not with respect to the partnership because a partnership is a pass through entity (it does not pay taxes). All taxes are paid individually by the partners. As long as the individuals agree to divide the profits, pay their respective taxes and there is a proper basis for that division (the ownership of the cattle for example) then all should be well.
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