Dividing Up a Farm

**forHISglory** · 05-22-2009, 05:37 PM

My parents have a farm worth about a half million. They are trying to make plans on what to do with this as far as an inheritance.

One thought that they have is to place it into a trust. They think that any expenses or income that comes off it would then be divided by all us kids. None of us knows much about a trust, so they are going to a lawyer to see how it works. We are wondering what happens if one sibling wants his/her share in cash, rather than a share of the trust. We are wondering about tax liabilities.

Meanwhile, I was wondering if any of you have ever had any experience with a trust. What worked well with it? What did not work well? What expenses did you have with it? What other options do you see?

My parents want to see the farm kept in the family, so this was their plan to see that happen. I would appreciate any insights you might have on this. Thanks!!

**savvy_sniper** · 05-22-2009, 08:14 PM

My mom had a revocable living trust. When she died my 3 brothers and I become co-trustees. That meant we all had to go to the bank to close her accounts, we all had to go to the bank to open new trust account, we all had to sign checks, we all had to agree on everything. Unbelievably my brothers agreed to step aside as co-trustees and let me be trustee. It required a legal document, but luckily a lawyer friend of my mom's did a bunch of stuff for us for free because he LOVED my mom.

By having a revocable living trust (with a will in it) there was no need to go through probate and less taxes. I am waiting to hear back from the tax preparer for 2008. We will either owe nothing or each have to file an amended return for 2008 and owe a small amount of additional taxes.

No matter what you do, it will have its trials and tribulations. The only thing I would say to do is to have ONE person be in charge of the trust after your parents die.

**Momto2Boyz** · 05-23-2009, 08:22 AM

Knowing from all that my grandmother has dealt with (luckily, she is still living) the best advice I can give is to find a really good attorney. Have your parents talk to several before deciding on one that they are comfortable with. A good attorney can be your best tool in staying organized when the trust needs to be put in place.

My grandmother also has a large estate tons of monetary assets, she went through 3 attorneys before she found one who came up with some compatible solutions to what she really wanted to do with everything when she passed. Some were simply unhelpful and others were just not able to explain her options well enough to her. So she kept searching until she found a great one!

**nancycg56** · 05-23-2009, 08:28 AM

My Mom has an attorney who specializes in elder law and he has been fantastic.

**Pemberleyan** · 05-23-2009, 09:04 AM

I don't have an answer about the trust, but I wanted to mention something else that hopefully isn't relevant and won't ever be necessary. In our state, if someone has to go into a nursing home and then is unable to pay for that service, their house and land can be attached, seized by the state. Therefore, some parents are now deeding what they were going to leave in their wills. If they do that five years before going into the nursing home, the property cannot be seized. It probably varies from state to state, but I thought it was worth mentioning. A good attorney is the best option for them right now.

**LuvMyHubby** · 05-23-2009, 11:35 AM

I haven't dealt with this kind of issue so have nothing that would be beneficial to say in terms of the legalities.

I just wanted to say that I think your parents are pretty awesome for having the foresight and desire to not only keep something so precious in family hands but to also try to ensure that there is a minimal chance of siblings having hard feelings in the end toward each other. I wish my Grandmother would have done the same instead of expecting everyone to get along or her one remaining daughter to respect her wishes.

Kudos to your parents.

**forHISglory** · 05-23-2009, 12:00 PM

Great advice! I had not thought about the nursing home situation, so I appreciate your bringing that up. The farm is a century farm, meaning that it has been in the family for over 100 years, and has a special commendation for that. I know my parents really want to see it kept in the family. We are hoping that even when they have passed, that it will still be a place where we can gather for family events.

**RaineyDaye** · 05-23-2009, 01:36 PM

I know my parents really want to see it kept in the family. We are hoping that even when they have passed, that it will still be a place where we can gather for family events.

That's what my parents wanted for our family farm as well. But instead of leaving it to all 6 siblings, my mother gave it to only one, about five years before she died. And he has only once had a family event in the past five years since her death; that was in the first year after she died. So, I commend your parents for being fair, even though it may be more complicated to leave it as a family trust.

**heartofmine** · 05-23-2009, 08:59 PM

Originally Posted by Pemberleyan

I don't have an answer about the trust, but I wanted to mention something else that hopefully isn't relevant and won't ever be necessary. In our state, if someone has to go into a nursing home and then is unable to pay for that service, their house and land can be attached, seized by the state. Therefore, some parents are now deeding what they were going to leave in their wills. If they do that five years before going into the nursing home, the property cannot be seized. It probably varies from state to state, but I thought it was worth mentioning. A good attorney is the best option for them right now.

Just wanted to say that this very thing just happened to my sil's family. Her dad died and although he had only been in the nursing home for 2 months the state seized his property before even the funeral bill was paid. The kids are stuck trying to pay a $10,000.00 funeral bill while the state has his homeplace and a few acres of land.

**rachelj** · 05-24-2009, 10:15 AM

Dh's grandparents had (they are both deceased) a farm. They have 3 sons - 2 of whom work the farm. Grandpa incoporated the farm - I think that is the term - so that gramps had majority share and the 3 boys then had the rest.

This way less taxes when he died etc etc - b/c the farm owned much of his estate.