For many Ohio families, farming is just “in their blood” and part of their identity. The family farm isn’t just a piece of property – it’s also a primary source of income and a physical representation of decades of hard work.
This can create some difficult issues when it comes to estate planning when you have more than one child. How do you keep things fair when you divide your estate without cutting the farm into pieces and diminishing the legacy of generations?
Equal and fair aren’t always the same thing
If you try to leave your estate to your children in equal shares, that can get messy – fast. If you have three children, for example, what happens if two want to sell their shares for the cash and the other wants to work the land? The child who wants the farm may not be in the financial position to buy the others out. By trying to keep the farm intact, you could end up dividing your family.
It’s often wisest to look at other ways to balance the scales. Life insurance, for example, may provide cash for two of your children, while you leave the farm to the one that wants to keep it. If the assets are comparable, that may be the truly fair option.
Another option is to consider arrangements that allow the child who wants the farm to buy out their sibling’s shares over time, rather than requiring an immediate purchase. A trust or business succession plan (if the farm operates through an LLC, partnership or corporation) can help keep ownership together and property in the family while still providing protection for additional beneficiaries.
In any estate plan, there are likely going to be things that cannot be divided. It may not even be possible to create perfect equality between your beneficiaries. You have to concentrate on what you believe is fair, rather than focusing on automatic and equal division of your assets. Experienced legal guidance can help you understand all of the options.