how an attorney changed the outcome of my lawsuit

Posted on: 12 November 2015

What do you do when you're trying to divide up your assets fairly between your children but their inheritance includes a family farm? Dividing things up equally may not actually be fair, and it might not get the result that you want for your heirs. Here are three things to consider when you're trying to divide up the family farm.

1.) Did some of the kids move off the farm while others stayed on?

Farming isn't for everyone. If some of your children have stayed on the farm to continue the family tradition and some of them haven't, you may want to consider the impact of giving equal shares of the farm to each child. Neither set of children is likely to be happy with the impact on their lives. The kids who want the farm may not be able to afford to buy out their sibling's shares in order to keep the family farm intact, and the non-farming kids may not want to be saddled with the responsibility of the farm and want to sell right away.

You might want to consider giving the farm to the farming kids as a reflection of their sweat-equity (the work they've already put into the place) and divide your other assets up among the non-farming kids.

2.) Are you sure that the non-farming kids will agree to sell their shares equally?

If you do decide to divide all your assets -- farm and non-farm property alike -- evenly, with the idea that the farming kids should have enough to buy out the non-farming kids, remember that you won't be around to keep order in the family. Your non-farming kids and the farming kids may not be able to agree on what's "fair" when it comes to a buy-out.

If you want to ensure that the farming kids have the opportunity to buy out the non-farming kids at a certain price, you have to write that into your will. Be specific about how the land will be appraised and valued and how long the farming children have the exclusive right to buy out the non-farming kids. Otherwise, your heirs could end up in a huge conflict, especially if one of the non-farming kids receives an "outside" offer for the property at a higher price.

3.) Consider a long-term provision to prevent the farming kids from taking advantage.

If you give the farming kids an option to buy out the non-farming kids, keep in mind that you are limiting the non-farming kids' opportunity to do what they want with the land. They would have to sell, even if they want to hold onto the property until its value increases or sell to someone that offers them more money.

Just to keep things fair, you can place some restrictions on the farming kids, too. Consider a provision that requires your farming kids to continue actually running the farm for a certain period of time after they buy out the non-farming kids -- unless they're willing to share the profits should they decide to sell the farm for more than they paid their siblings.

When it comes to dividing up farm property there's more than just money involved -- your desire to keep the family land in the family has to be weighed against the potentially diverse desires of your children. For more advice, talk to an attorney about the best way to go about planning your estate.