Save the farm?

[marko]

You obviously did not grow up on a farm where some well maintained 100+ year old barns still have your great grandpa's tools hanging on the walls. If it was just a "business" decision then more than likely the farm would have been gone a long long time ago. I understand the OP's burden and do not envy anyone who HAS to sell something that has been in the family for generations. Not everything is about money.

When I said "business decision" I mean looking at it objectively and trying to remove the emotion from it. Not just money but how you will be better/worse overall by going one direction or the other. Of course it IS emotional but one should strive to separate the emotions from the realities as much as possible.

No I didn't grow up on a farm but I did have to sell the family homestead just last year.

It had been in the family for 135 years, we lived there ourselves for 30 years and it was supposed to be our forever home. We had just put about $50k in upgrades the year prior coupled to $150k and a ton of love when we moved in years ago.

Yes, my grandfather's and my great grandfather's tools were in our basement and it cost us over two grand to have them removed.

It wasn't a financial decision as much as a quality of life decision where a changing neighborhood forced us to sell.

It was incredibly emotional and gut wrenching but we had to weigh what our future would be like staying there along with the property value dropping. So despite the thousands of memories, blood sweat and tears invested and years of good times we made a business decision --that is, looking at it objectively (and cried for a week). But it was the right thing to do.

FWIW I still own my great-great grandfather's house (other side of the family) where my 92 y.o. mom and disabled brother live (and where I grew up), so I do know and appreciate what it's like to have a history with a property. Still, when the time comes--we have no direct heirs--I'll be forced to make a similar, painful and difficult business decision...and cry for another week or two.

 

[monte1022]

When I said "business decision" I mean looking at it objectively and trying to remove the emotion from it. Not just money but how you will be better/worse overall by going one direction or the other. Of course it IS emotional but one should strive to separate the emotions from the realities as much as possible.

No I didn't grow up on a farm but I did have to sell the family homestead just last year.

It had been in the family for 135 years, we lived there ourselves for 30 years and it was supposed to be our forever home. We had just put about $50k in upgrades the year prior coupled to $150k and a ton of love when we moved in years ago.

Yes, my grandfather's and my great grandfather's tools were in our basement and it cost us over two grand to have them removed.

It wasn't a financial decision as much as a quality of life decision where a changing neighborhood forced us to sell.

It was incredibly emotional and gut wrenching but we had to weigh what our future would be like staying there along with the property value dropping. So despite the thousands of memories, blood sweat and tears invested and years of good times we made a business decision --that is, looking at it objectively (and cried for a week). But it was the right thing to do.

FWIW I still own my great-great grandfather's house (other side of the family) where my 92 y.o. mom and disabled brother live (and where I grew up), so I do know and appreciate what it's like to have a history with a property. Still, when the time comes--we have no direct heirs--I'll be forced to make a similar, painful and difficult business decision...and cry for another week or two.

I misjudged your statement and I apologize. You have depth...my kind of person

 

[ivinsfan]

I misjudged your statement and I apologize. You have depth...my kind of person

That's good of you to correct yourself and a whole lot of judging goes when it comes to these "family farms". These situations get messy enough without others telling us we don't "get it", when in fact they don't "get it".


I thank my lucky stars that 2 of my DH's sibs and their spouse were more then considerate when the fate of the in laws farm had to be decided. In a 6 month period Dad died and Mom got dementia. When it was all said and done we were able to civilly decide on price and terms and we all just moved on.


It helped that we all had stable jobs and good finances and cared about family harmony. As one of the farming sibs we were able to cash flow out our share of the purchase price.

 

[Stormy Kromer]

That's good of you to correct yourself and a whole lot of judging goes when it comes to these "family farms". These situations get messy enough without others telling us we don't "get it", when in fact they don't "get it".


I thank my lucky stars that 2 of my DH's sibs and their spouse were more then considerate when the fate of the in laws farm had to be decided. In a 6 month period Dad died and Mom got dementia. When it was all said and done we were able to civilly decide on price and terms and we all just moved on.


It helped that we all had stable jobs and good finances and cared about family harmony. As one of the farming sibs we were able to cash flow out our share of the purchase price.

You were indeed fortunate. My brother and I couldn't get along well enough to have a garden together, let alone a farm. I am thankful that our parents split their farmland into specific parcels in their wills. Mom is still alive and doing well. She has had to sell the home place to pay off DB's debts, this parcel was part of his future inheritance.

DW and her sister aren't on speaking terms and their dad isn't even gone yet. DSIL moved in with DFIL and won't let DW on their dad's farm for fear she may steal something. She changed all the locks and put in a high end security system and told DW and I not to come on the place without her invitation. That was 3 years ago and still no invitation.

Not to get off topic from the OP, these are just a couple of examples that can happen when a family owns a farm together for multiple generations.

 

[OldShooter]

Lots of scenarios mentioned here. I'll throw in one kind of solution that hasn't been mentioned -- maybe it will stimulate someone's thinking. Our estate attorney also specializea in "cabin trusts." ("camp trusts" in Maine, I suppose.) Like this:

The idea is where a property is to be shared by a number of heirs, put it into a trust that specifies the rules for sharing. How expenses are paid, what happens when an heir can't or won't pay, how the use of the property is to be shared, etc. In addition to making all the rules clear, this judgment-proofs the property against liabilities that an heir might develop, including divorce, Medicaid recapture, child support, etc. Sharing doesn't have to be identical for everyone, either. In the case of a farm, one heir might have exclusive use of the homestead and another heir might have exclusive use of the land, implicitly or explicitly allowed to lease it. There typically would be rules for dissolution of the trust, maybe by two supermajority votes taken a year apart.

In addition to putting the property into the trust, there is the option for the grantor to provide funds to pay future expenses; property taxes, maintenance, etc. for some period or possibly in perpetuity. Again, there would be rules on dissolution and to keep heirs from busting the deal simply to get at the expense funds.

This is specialized stuff, as it the tax aspect of it. The above is about 110% of what I know, so expert help is definitely needed if exploring that road.

 

[marko]

That's good of you to correct yourself and a whole lot of judging goes when it comes to these "family farms". These situations get messy enough without others telling us we don't "get it", when in fact they don't "get it".
.

I misjudged your statement and I apologize. You have depth...my kind of person

No need for apologies!! I've had a flaw since 6th grade where I make short pronouncements assuming that everyone knows where I'm coming from.

All good bro.

But as a cautionary tale, I had a secretary who was older and her husband died. They had a huge property on about 20 acres of land. She went into bankruptcy--and a heart attack--trying to keep the place up, running and his memory alive.

 

[marko]

Lots of scenarios mentioned here. I'll throw in one kind of solution that hasn't been mentioned -- maybe it will stimulate someone's thinking. Our estate attorney also specializea in "cabin trusts." ("camp trusts" in Maine, I suppose.) Like this:

The idea is where a property is to be shared by a number of heirs, put it into a trust that specifies the rules for sharing. How expenses are paid, what happens when an heir can't or won't pay, how the use of the property is to be shared, etc. In addition to making all the rules clear, this judgment-proofs the property against liabilities that an heir might develop, including divorce, Medicaid recapture, child support, etc. Sharing doesn't have to be identical for everyone, either.

This is very typical in our neck of the woods where large, family homes become divided among children/grandchildren as a vacation property. Each branch of the family gets X weeks per season and a trust takes care of expenses. Maybe everyone crowds in for Christmas--if they're all on speaking terms!

These are usually "6-8 bed, 4-6 bath" waterfront estates that are now occupied by 4th generation family members who have no memory of the original grandparent.

 

[Jonesee]

I am in a similar situation. Very elderly parents. Will has been drawn up. The farm will be split between me and my sister. I want to keep the farm together and my sister has no interest and will sell her half, splitting it up. I can buy her half, but to be fair, it would have to be at market price or I'd be taking money out of her pocket.

I live half way across the county, and realize I would be buying a real estate tax bill and ongoing upkeep and maintenance costs. Trying to figure out if it is worth it just to leave it to my sons.

 

[Stormy Kromer]

I am in a similar situation. Very elderly parents. Will has been drawn up. The farm will be split between me and my sister. I want to keep the farm together and my sister has no interest and will sell her half, splitting it up. I can buy her half, but to be fair, it would have to be at market price or I'd be taking money out of her pocket.

I live half way across the county, and realize I would be buying a real estate tax bill and ongoing upkeep and maintenance costs. Trying to figure out if it is worth it just to leave it to my sons.

Ask your sons now. Don't assume they'll want it. I am in a similar situation and know that DB will either lose or sell his land when mom passes. I asked my kids if I should buy it and leave it in our estate. They were honest and said no, they weren't interested.

 

[ivinsfan]

I am in a similar situation. Very elderly parents. Will has been drawn up. The farm will be split between me and my sister. I want to keep the farm together and my sister has no interest and will sell her half, splitting it up. I can buy her half, but to be fair, it would have to be at market price or I'd be taking money out of her pocket.

I live half way across the county, and realize I would be buying a real estate tax bill and ongoing upkeep and maintenance costs. Trying to figure out if it is worth it just to leave it to my sons.

I don't know where the farm is but prepare for some sticker shock....south western MN a few miles from our place 109 acres at 9780 an acre and of course this means my RE taxes will go up for 22.

 

[Mr._Graybeard]

I don't know where the farm is but prepare for some sticker shock....south western MN a few miles from our place 109 acres at 9780 an acre and of course this means my RE taxes will go up for 22.

Farmland has become an investment vehicle. Billionaires like Bill Gates and Warren Buffett have bought up massive amounts of it. When I sold off Dad's 100 acres southeast Wisconsin in 2019, a mutual fund manager with $1M in his checking account snapped it up.

 

[all4j]

As others have noted, not really enough info to offer a solid suggestion. I usually find these threads of interest for the many varied perspectives & this had some intriguing ones.

I'll suggest that the very fact that the OP posted it indicates that it is indeed not a financial matter, but rather a family dynamics matter. Avoiding that for the future by those reading this maybe a valuable outcome from the thread.

The 3 siblings that "don't care" may be patient now, but will likely want some cash soon enough & perhaps expect to disentangle before their heirs face it. The "entitled" one may not appreciate the upcoming eviction when a sale occurs. I'm assuming there has been a fairly recent death....who is the executor? They have a tough decision!

I mainly wanted to add though that farmland can actually be a very good investment, especially now. As with most real estate, specifics are what matters. But farms can be a good inflation hedge, act uncorrelated to stocks, etc. I'm not surprised by the many negative comments, but would caution against making assumptions based on limited experience and/or "folk lore".

 

[Rocky mtn high]

Yes, bill gates and buffet have bought many acres and then their followers have bought more, pricing the average farmer/investors out of the market.

 

[ivinsfan]

Yes, bill gates and buffet have bought many acres and then their followers have bought more, pricing the average farmer/investors out of the market.

In this case it wasn't any of the above but a guy that farms about 4 miles from us. Time will tell if her regrets the purchase.