How to keep for myself and then later divide up with my children a small farm----120 acres.?

Question

I have a small farm---120 acres. It is in an area that is appreciating in land value. I will likely need at least a portion of it's value for my retirement. I have six children. Of these six, one son is very interested in agriculture. I want to be a partner with him on this farm, but I also want to be fair with my other children when it is time for me to, well die. I'm sure other types of businesses have had similar situations. I realize that I will need to use a lawyer to draw things up but I want to have somewhat of an idea of how I might go about this. Thank-you

Answer 1

You probably should be discussing with an estate attorney in your area. But there are a couple of ways you might think about doing this. Please don't just give equal shares to your children because while it seems fair on it's face, it won't prevent problems if the one child/son wants to keep the property as a farm and others want to sell. What you might do, is reserve a life estate in the entire residence/farm for yourself. That protects you for your lifetime. You can then set up a partnership with your son and determine his payment/income/revenue from the farm on a fair basis equal to his input.

Upon death, in your will or trust, you might want to deed/gift the farm to the one son who is interested in keeping the property. That lets him have what he wants or wants to continue to have as an operation. Then provide that an appraiser be appointed (it can be someone you trust) or you can have your son/farmer pick one; the other family members pick another; and then those two appraisers pick another. Let them all appraise the farm and agree on a value (or let them all appraise and have the average used....there are some problems with this though). But determine or think out a method that you believe is fair. Then let the Son mortgage the land or borrow the funds and pay that portion (value at your death) to your other kids.

If you have other assets, you can give these to the other children and offset the value of the farm further.

This is a difficult but resolveable situation. Good Luck

Answer 2

There are several ways to accomplish what you are attempting to accomplish. In either case you should contact an estate planner or someone that can make up and "FUND" a revocable living trust.

In a living trust you can run things up to the point that you are no longer capable of doing so. If you and your son are in business then you can treat the farm as a business and give shares of the corporation to your other children with the one that is interested as CEO or president after you are no longer interested or what ever happens.

You may leave the farm intact allowing your son that want to farm do the farming, but pay your other children a certain percentage over the years or any other way you and your estate planner decide.

I don't know about equity but you may give more to your son that want to farm and less to those that don't want to farm.

Then there is the fact that you can divide the farm up equally among your six children. But then you know what would happen, some would want to sell, others keep, some might want to develop the property.

So you might have to sit down with them together or individually after which you can make an intelligent decision as to what you want to do.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

As I see it, the only fair way to split it equally among all 6 children, is get it appraised and set a value. It doesn't have to be the value at the time of your death, you can set any value you want. If your one son wants to farm the land, he will have to pay off the other 5. Don't make it so unreasonable that he can't do it, talk to them and get their idea, too.

I'm in the same boat with 2 houses and 3 children...

Answer 4

Sell him the farm for 5/6 of market value. He gets his inheritance up front. Invest the proceeds to provide for your retirement with the remainder going to the rest of the children upon your passing.

Answer 5

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Answer 6

You need to set up trusts, see a real estate attorney. There are several good options for you.