There Goes the Farm

June 23, 2011 by Heller Group
Comments Off on There Goes the Farm

 

 

There goes the farm — to the next generation —–

 

 

It use to be tradition that the family farm, went to the next generation.  In the 20th century, it was easy to do that because it seemed like there was nearly always a son or family member who wanted to continue farming the family farm.  But now as the size of farms get larger, and our children want to move to the big city to have a career and raise a family, so that “next” generation is not so important to them to remain on the farm.

So now what? Our parents still transferred the farm to their children, but we cash rent the farm out to the neighbor and love having the extra income.  Yes, once in a while there is a spat between siblings or siblings’ spouses.  But that cash rent pays for our entertainment and vacations and life is good.  Then comes that day, when you get that phone call that one of your siblings or siblings’ spouses passes away.  Now we have more people involved in the family farm.  We have to deal with the nieces and nephews. Or my spouse or I may pass away and our children and their families have to deal with their aunts and uncles and maybe even their cousins.

Does it sound complicated?

Example:

 

Grandma and Grandma Smith died about 33 years ago.  They left 160 acre farm to their three sons, who decided to keep the farm and cash rent it out.  One son lived within a half a mile of this farm. Then the youngest son past away and gave his 1/3 share of the farm to his three children with a life estate to his wife  A year later, the oldest son, who never married, suffered from dementia and was in the nursing home for seven years.  During that time, he needed money so his nephew, purchased his 1/3 share of the farm.  A few years later, the middle son passed away and willed his 1/3 share to his four children, with a life estate to his wife. So when the 2 wives pass away, we will have seven nieces and nephews owning 2/3’s of 160 acres.

Who is going to want to buy 2/3’s of a farm?  Probably one person, the nephew that owns the other 1/3. Are the seven of them going to agree to sell the farm at the same time? Are the seven heirs going to agree on a listing price? Could the seven heirs be lucky enough that the nephew owning the 1/3 would want to sell the farm at the same time? At least this farm is NOT the farm that Grandma and Grandpa first homesteaded when they came to Minnesota nor does the farm have any buildings where Grandma and Grandpa lived, so we are not dealing with those feelings.

This example happens to be a friend’s situation.  She is frustrated because Mom won’t sell her 1/3 share of the farm because Dad gave it to her and she likes getting the income off the farm each year.  She can understand Mom’s feelings, but she wishes Mom would think about the complicated situation she is going to be leaving for her 3 grown children.

So, maybe now is the time to sell the farm before we have to get the next generation involved.

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