I have three children: two who left the farm as soon as they could, and one who is farming. Good kids, but not interested in farming. Our farming child is a daughter who married a rancher. He’s worked in our operation for many years now and has proven to be strong and reliable.
I do have one problem, however. My wife and daughter seldom see eye to eye on a variety of different subjects. I am older than my wife and expect to go first. I can see that this may cause a rift that’s been ongoing for some time to explode after my death.
I want to make certain my daughter receives the farm, but I’m not sure my wife will honor my wishes after I die, or make it so miserable for my daughter she’ll want to leave.
How do I deal with all of this?
– Caught In Between
You have one or two options.
You might consider doing a life estate with the property and put your daughter’s name on the deed today before you die. In the event of your death, the deed can’t be taken out of your daughter’s name without her consent, and she’s likely not to give it considering her livelihood is wrapped up in that ranch.
If the land is in both names today, your wife will still have to sign the life estate deed to your daughter, but if she still listens to you today, then perhaps she will sign, and you don’t have to worry about your will being changed.
It does leave a little room for future problems in that in the event of your death. Your spouse still has the right to the use and income of the property. If she and your daughter get into a severe blowout, it’s conceivable your spouse may either raise the rent too high, or she might rent to another party until her death. That would be catastrophic for your daughter and her family’s future on the ranch.
Perhaps, in addition to the deed, you need to consider signing a long-term lease with your daughter and her husband regarding how much they would have to pay for rent on the ground. It could be based on either a per acre or per head basis so that it mirrors what you are doing today.
If your wife is still agreeable enough to sign this as well, based on the conditions you put into the lease (County Average rental rate maximum, etc.), then we need to have this lease long enough to outlive any issues she and your daughter may have after your death. If she’s in her 60’s, perhaps a forty-year lease, in her 70’s, maybe a thirty-year lease.
Your daughter will need something in addition to the life estate deed to protect herself from any future blowouts.
Life is going to be either very easy as they bury the hatchet and get on with life after your death, or it’s going to get messy if they continue to tangle over certain issues. As long as your wife has the power to either raise the rent or rent to someone else, if she gets too angry, she can do either one or both.
The other issue which is going to play into it is this: Is your wife provided for, so she is comfortable after you die, financially, physically, etc.? Is she going to live the lifestyle she wants and is there enough income to do that?
You might consider adding another piece as well. Taking some of your investments and using it to procure long-term care coverage for both you and her will go a long way towards making life comfortable. If you get sick and use up all of the money you’ve saved up, she’s going to need cash after, and her only option will be to go after your daughter.
To wrap everything up: Use a life estate to make sure the deed goes to your daughter. Get a long-term lease signed to cover your lifespans. Make certain your health doesn’t put your wife into the poor house by realigning some of your assets. Make certain your wife has enough income to live comfortably.
We have a son who is divorced and has two kids. We never get to see these kids because their mom and our son had a pretty acrimonious divorce. For the most part, he probably deserved it, but now we don’t have a relationship with our grandchildren at all. At every chance, the ex and his children continue to badmouth him.
He’s grown from that experience and isn’t the person he used to be, but they continue to remind everybody of his past mistakes. He tries to do things right but to no avail. This sounds more like “Ann Landers” than it does estate planning, but we had planned on leaving all of our kids some of our land. None are farming so we don’t have that issue.
However, the thought of our son’s children and/or ex getting their hands on our land if our son should die has stopped us from doing anything.
What should we do?
– Limits to Patience
Dear Limits to Limitations:
Don’t feel all alone, Limits. We still have a divorce rate more than fifty percent and their seldom pleasant experiences for anyone. Especially when one ex runs down the other one and never lets them escape their past mistakes.
Regarding your son, you have to decide whether or not you want your son’s children – your grandchildren – to ever share in the value of the land if you were both to die today.
If you leave it to him outright, and he dies without a will, they would be his natural heirs. Even if he willed it to someone else, they may put a claim on the property and make life miserable.
If your son doesn’t need to own the land immediately and would be happy with income from the land, set up a testamentary trust in your will, so the trust owns the land and one of your other children can be the trustee. He can receive the income, and you can leave it up to the trustee to determine when your son should receive the property outright.
I would suspect there would be some collusion with the trustee and your son as to when your son would feel safe to own the land or when his children’s opinions of him ever change, and he feels they should have their birthright.
If he should die in the meantime, you can then determine who would receive the property. (Perhaps spread out amongst the rest of your children?)
Maybe you would feel better if your son dies, the income would be spent towards your grandchildren’s education or some other worthy cause, such as something your son believes in to be a worthwhile charity.
If you see some relief in this situation as the grandchildren mature, perhaps you’ll feel differently about things, and you can always change your will, so the property goes to him directly.
But no one was ever hurt by receiving income from farmland over their lifetime or until you specify, so put this in your will and sleep well tonight. If the grandkids come around, change your will accordingly.
Don’t feel guilty about not leaving them anything, if that’s what you decide to do. We all make choices, and we need to live with the consequences of those choices.