Dear Michael: We have a child who wants to get into farming. These days, all we can do is let him rent some land and hope the landlords don't take the land away from him. With the costs of machinery and land, it's getting harder and harder to bring a child into the farming game. He rents quite a bit of land right now, but you're never sure if the landlords die if he's going to get the opportunity to farm the land. Do you have any suggestions? – Hopeful Farm Parent
Dear Hopeful: As a matter of fact, I have a number of suggestions – surprising as that may be.
One, with all of his landlords, your son should be creating inroads to a future with this land and how it's going to be handled.
Recently I attended a forum put on by Bill Hodous, County Agent and NDSU County Extension and they had a wonderful program on how to work with landlords.
One thing about landlords or ladies is they were farmers in the past. The reason they are renting their land is because none of their children wanted to farm – obviously. They have allowed your son to rent the land because they like him.
When I ask if the son has a rental or purchase agreement with their landlords, I always get the same look. 'Oh, no, I wouldn't want to do anything to upset our relationship' so they do nothing, and nothing is exactly the wrong thing to do.
What they should be doing is keeping in touch with their landlords – even out of state ones – regarding how the land is being farmed, how the crops are looking, what problems they encountered throughout the year (too wet, too dry, etc.). Why? Because ex-farmers like to know how their land is being handled, what problems you encountered, etc. They want to know how their land is producing and they want to be involved in the process. You don't have to tell them you netted two hundred dollars per acre, but they want to be informed.
Remember, retired farmers are just like old hunting dogs. When the weather gets nice, they get the urge to farm. Being as you are renting their land, you should be keeping them informed of what's happening with their land. This is building a bridge of communication and making certain you have a personal relationship with your landlords. If all you do is send them the rent check each year, don't be surprised if they get a better offer some day and take it.
However, if you keep them involved in your (their) farming operation, it would take dynamite to get them to move from you.
The other item is once you've established a wonderful rapport with all of your landlords – using, perhaps, monthly updates in a simple format – and you feel much closer to your landlords, you need to then ask them some simple questions.
Here is the ultimate goal of being nicer to your landlords and keeping the informed on a more personal level. You want to know, one, they aren't going to accept a higher bid without talking to you. Two, you want to know if they should die, do they want you to continue to farm the land, and lastly, if their children decide to sell, where do you sit in the mix?
One has to keep a basic belief in mind – all ex-farmers are against seeing their land split up into smithereens once they die. They spent their lives building this farmland and would love to see this legacy continue on and on. Being as none of their children are farming, you are their surrogate 'child'.
Here's the approach. 'So, Mr. or Mrs. Landlord, We are doing some estate planning and we need to know if we can count on this land as a part of our operation? I just wanted to know if it's still going to be possible for me to rent the land from your children should something happen to you. None of us knows what the future will hold, but I'd still love the opportunity to at least match any bids your children might receive for renting the land. If I can't match it, so be it.'
'Also, if your children should decide to sell the land, is it okay if we get it appraised – so your children get a very fair price for the land – and I'd like to be able to buy it for the appraised value? I don't know if you want to keep this land together after you die (they do!) but in my own life, I'd like to know what I can count on?'
If you've built up a great rapport with your landlords, and have an open line of communication with them, having this conversation should be the easiest thing in the world. They want to see their land kept together – and the alternative, when they die, is it's likely going to be blown up into so many pieces, no one will remember who owned it.
However, if you show them the way how this will always be known as the 'Fred Anderson' farm forever, you'll find many of your landlords are in favor of this. But you need to get it into writing – a simple piece of paper with the terms listed above will do and have it witnessed or notarized, if possible. If not, handwritten is good. Don't be surprised if they say no, at first, but keep them in the loop about the farming, and sooner or later, many, if not all, of your landlords will be working with you on your estate planning.