Dear Michael: Our father recently died. Mom had died about ten years ago. In my father’s will, it stated that our youngest brother should be able to buy the land from us as he stayed with the farm. Before Dad died, the farming son owed quite a bit of money on rent to Dad. He hadn’t paid for going on three years and Dad had never pushed it with him. Dad always kind of tried to take care of him.
When the attorney was settling the estate, he told us the farming son could buy the land for well below market value at a set amount in Dad’s will. However, the attorney also noted that Dad’s death had left quite a bit of debt for health care costs before he died. The attorney told us to collect the rent from the farming son that was past due (into the six figures) and then we could sell the land to our brother.
In the meantime, our brother the farmer hired an attorney and said he has the right to purchase the land and the rent due should be considered a gift from Dad to the farming son, as he never pushed to have it paid. Dad had a ledger of what was owed and our attorney says it’s not a gift. The farming son is going to use the rent owed to make the down payment on the land – money that should have went to the non-farming children.
Now, we’re all headed to court and nobody’s speaking to one another unless it’s through an attorney. This just breaks my heart because I know Dad and Mom never envisioned our family would become a battleground full of hate, spite and venom.
This isn’t the legacy they wanted at all.
Signed, In Tears
Dear In Tears:
When farms were small and people had five to ten children, there wasn’t enough estate to fight over. Most of the time it was a fight to determine who had to stay on the farm.
Nowadays, when land values add up to hundreds of thousands, or even a million or more, and there’s machinery, livestock and other assets also worth hundreds of thousands, when this estate owner dies, without a proper estate plan and communication prior to death, pandemonium is guaranteed most often resulting in families irrevocably split apart. The legacy of each family farm – which used to be the proudest thing a farm couple could leave behind – now is often a long, lingering, neighborhood memory of how their children fought.
With asset values as high as they are, farm couples are going to have to get a lot better organized in their estate planning and communication with their children as to what is happening now – if there’s a farming child – and what’s going to happen in the future. This isn’t a chat with just the child on the farm – it’s a chat with all of the children.
And it’s not just a chat with vague ideas and thoughts. Back up your chat with the proper legal documents as to how everything is to proceed, both before and after your death. Bring these to your family conference to show your children what your plan is and what happens if things do go the way you think they will, or if they don’t.
Name two of your children as financial and as health care power of attorneys so they can manage your affairs – both financially and for health care decisions. Make certain these children understand your intentions and will abide by them. If you don’t think they will use a commercial trust officer to handle it for you.
In your case, In Tears, the only answer I have for you is ‘woulda’, ‘coulda’, didn’t’ and now the courts will decide. Not the answer you wanted, I’m sure, but there is no answer that would have healed your family back to normal.