Your farm has been part of your family for decades, possibly generations. You and your family have worked hard to build up the business and make improvements. You have likely put your entire life into the farm, and now you need to know how to split up the farm when the time comes. You want to ensure that your children each get their fair share while ensuring that the farm stays intact and continues to thrive for many more years. Splitting up the family farm can be the hardest decision you will ever make. A knowledgeable attorney will help you through the estate planning process.
Put a Plan in Place
Because it is such a difficult decision, many people fail to implement a plan to pass along their family farm. Unfortunately, this can be a mistake. It is much better to put a plan in place than to have no plan at all. While any plan you choose may have imperfections, it will undoubtedly be better than providing no direction. Estate planning will help you consider all the many questions and address the concerns involved in dividing up a family farm. It is essential to keep in mind that your farm is essentially a business, and it can be very challenging to try to split it between relatives.
Strategies for Splitting the Farm
There are two main strategies to consider when splitting the family farm. You may choose to sell the farm and all the assets and divide it evenly amongst the heirs. The other choice is to put a plan in place to divide the farm and continue the operation. This is certainly the trickier choice because there are many things to consider. However, if you want to keep the farm in the family, you will want to put a plan in place as soon as possible. Whatever you decide, you will want to ensure that you divide up the assets fairly and equitably between heirs.
Transferring Ownership
Transferring ownership of the family farm is harder to accomplish than it sounds. If you fail to address certain issues, they can become points of contention among the beneficiaries. You will need to decide who will work the farm and how the ownership is apportioned between siblings. Questions could arise later, so it’s best to address them now. For example, what will happen if some siblings want to keep the farm while others want to sell it? What happens to the income or debt that the farm incurs when some siblings are not working on the farm? Does the heir who is working and living on the farm have to pay rent to other siblings?
Consider Alternatives
Another alternative that may be of interest is to give the family farm to the heir who wants to work it and give other valuable assets to your other heirs. This option is particularly helpful if one specific child has already been working the farm and has taken over many of the functions. You will want to keep in mind that the child who has been making a living on the farm will want and need to continue. If you sell the farm or divide it between beneficiaries, you could very well be taking away that child’s living.
There are many complicated decisions regarding how to split the family farm. Taking a hard look at the choices and putting a plan into place is something that will help your family make decisions later. Get the legal guidance you need to put an estate plan in place from our team at Moen Sheehan Meyer, Ltd. by calling (608) 784-8310 or contacting us online.