Fee Simple

Fee simple is a form of ownership in real property. Specifically, it refers to an owner having full and irrevocable ownership of the land and any buildings on that land. Fee simple is the highest form of property ownership, and most real estate firms own real estate Fee Simple.

Putting ‘Fee Simple’ in Context

Greenfield Family Farms is a 1,200-acre farm located 60 miles outside of Des Moines, Iowa. The farm has been in the Greenfield family for over 100 years, passed down from generation to generation, with each new owner taking on full, fee simple ownership of the land. The current owner, Sarah Greenfield, recently inherited the farm from her father as part of an estate plan designed to maintain the property as a family asset.

As the fee simple owner, Sarah holds the highest possible form of ownership, meaning she has absolute rights to the land and any improvements made on it, including the farmhouse, barns, and irrigation systems. She can use, lease, or sell the property at her discretion, and she is also responsible for managing any taxes or liabilities related to the land.

The family’s goal is to continue operating the farm as a working agricultural business while also exploring ways to maximize the tax advantages that come with holding the property in fee simple. The property is integral to Sarah’s estate planning strategy, allowing her to pass it down to her children without relinquishing control or reducing its value. The land’s value has appreciated steadily over the decades, and as the sole owner, Sarah benefits from this long-term wealth preservation.

Since the property is owned in fee simple, Sarah is also considering leasing a portion of the land to a local renewable energy company to install solar panels, adding a supplemental income stream. Because she holds fee simple title, she has the authority to make this decision without needing approval from any other parties.

In this case, fee simple ownership ensures that the Greenfield family retains full control of the farm’s operations, land use, and future disposition, with the flexibility to optimize the property for both income generation and estate planning purposes.