• Dad also feels, like mom, that all four children
should equally own the farm and the two active
sons should make decisions on operating the
farm. They believe this is “fair”
• Estate documents reflect equal ownership and
no business documents have been drafted or
installed
Taking the above scenario into consideration, it’s
time to ask some hard questions, like:
Can the farm survive if you divide into it four
equal parts?
If not, how will that affect the farm’s ability to
support those who are caring for it? Who will be in
charge? Who will make critical decisions on its care?
Another common choice farm operators make is
consolidating ownership of the land and operations
with the active children. But, that may mean that the
non-active children receive less, maybe much less
than an equal share of the farm operator’s estate.
One way to compensate children who will not
receive a share of the farm is a buy-sell agreement
funded by life insurance. The farm operator can
buy a life insurance policy, the proceeds of which
will allow the children who will operate the farm to
purchase the remaining shares of the farm from the
children who will not operate it.
While planning for the future success of your
operation, you and your family may have to face
tough decisions that can be contentious. The best
approach is to confront the issues, not avoid them. In
the end, the long-term needs of the farm should be the
primary priority to increase the odds of success for
the transition and the ability of your farm to provide
for your family into the future.
(Donald G. Schreiber, technical director of
advanced sales for Nationwide Financial, is a
registered representative of Nationwide Investment
Services Corporation, member FINRA. Neither
Nationwide nor its representatives give legal or
tax advice. Please consult with your attorney
or tax advisor for answers to your specific tax
questions. For more information, contact your local
Nationwide agent, call 1-877-OnYourSide, or visit
nationwide.com/wvfb.)
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West Virginia Farm Bureau News 7