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Tuesday May 17, 2022

Case of the Week

Rodeo Rider Retirement


Mac Swenson loved the great outdoors. He grew up in the Big Sky country of Montana. As soon as he could walk, Mac was on a pony. By his teen years, Mac was riding horses every day. On weekends, he watched with admiration as the older cowboys practiced riding bucking broncos at the local rodeo grounds. By age twenty, Mac was riding the rodeo circuit. He soon moved up to the most exciting event at the rodeo – bareback riding on the wild and powerful Brahma bulls. Mac was lean and tough, and soon gained a national reputation as a skilled and fearless Brahma bull rider.

As a top Brahma bull rider, Mac traveled the rodeo circuit. At a rodeo in Burwell, Nebraska, Mac watched with great interest as a lovely and charming young lady named Glenda Olson was crowned the rodeo queen. Mac was head over heels in love. At the square dance that evening, he asked Glenda for the next dance. She was quick to accept. Love soon blossomed and Mac told Glenda that she meant more to him than even his horse Ranger.

Glenda was also in love with the handsome and athletic cowboy. She watched the next day as he mounted the snorting Brahma bull. He gave the release signal and the bull exploded from the pen. Within three seconds, Mac was thrown violently and then kicked by the rampaging bull. To the horror of Glenda and the crowd, Mac had broken his leg in three places and was trying to crawl to safety. Fortunately, the rodeo clown heroically distracted the angry Brahma bull, and two cowboys dragged Mac to safety.

Glenda visited Mac in the hospital during his recovery. He realized that his bull riding career was over, but a new life beckoned. Glenda and Mac were married and he used the rest of his rodeo winnings to buy a small ranch near the Beartooth Mountains in Montana. Over the years, Mac and Glenda raised four children, and steadily built up the ranch. Both loved the Big Sky country and planned to spend the rest of their days watching the sun set over the Beartooth Mountains.

As Mac and Glenda reached their sunset years, the ranch was now over 7,000 acres. One day, a new neighbor moved into the ranch next door. Glenda asked, "Who is our new neighbor?" Mac replied, "Some fellow from California. I heard he is a director or movie star. Joe down at the feed store claims his name is Bob Brown." Their neighbor Bob Brown was gone all winter, but returned in the spring. Mac's leg injury was making it steadily more difficult for him to manage the ranch, even with a seasoned crew of cowboys to help him. Glenda said, "You know Mac, our four children have left for the city, and no one is here to manage the ranch. I know we both love it here, but eventually you may need to think about selling."

A few weeks later, Bob stopped in for a visit. He and Mac enjoyed talking about cattle, the weather and the hay crop. After hearing how Mac and Glenda had built up their ranch over the years, Bob mentioned that he was looking for a way to expand the size of his ranch.


If Mac and Glenda are ready to consider retirement, how can they do this in a way that reaches their goals? Mac and Glenda want to live in their home, would like to give up managing the ranch, need a good retirement income and want to pass some benefits on to their children. While he always pays his fair share of taxes, Mac would like to make this transition with no added taxes.


The solution will involve several parts. Like most of their rancher friends, Mac and Glenda are land rich and cash poor. They can use a unitrust and sale for most of the land. A life estate will be needed for the homestead portion so they can live there. Another trust may be necessary for their ranching equipment. But there already is one problem – Mac has a note on the ranch and refinanced two years ago to take advantage of the low interest rates. The loan is not large, but it is only two years old. Mac called his CPA, Bill West, and asked, "What shall we do about the mortgage on the ranch?"

Stay tuned – Bill is researching and will have an answer next week.

Published June 4, 2021
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