Succession gets especially tricky for family farms, Wag-
ner says, in which the business is often also someone’s
home. He has clients in situations where some children
want to keep the operation going, but some do not. The ones
who do must enter into a lease agreement with other fam-
ily members who still live on the property. This creates a
conflict of interests. The owners want a good lease to pay
for maintenance, ditches, land and water rights. The ten-
ants want a good deal so they don’t get priced out. Being
family, the negotiations can be more informal than if they
were unrelated parties, Wagner says. When some mem-
bers operate the farm while others are passive, this infor-
mality can cause disagreements that result in litigation.
He adds that family-owned mobile home businesses face
similar struggles.
Conflicts may be resolved with conversation. But these
aren’t easy conversations for some to have. One of Wagner’s
clients has reservations about their child’s spouse and want-
ed to ensure, in the event of a divorce, their child’s share
would be protected. To accomplish this, the client set up a
spendthrift trust for that child, funded with a few properties
that the other children had no ownership interest in. This
way, the siblings wouldn’t be impacted from a divorce.
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October 2018 | comstocksmag.com
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