Difficulties arrive because the attitudes of the children toward the farm may be quite different.

Children wanting to stay with the farm expect to invest a lot of time and effort, initially without having much to show for it. Their feeling then is that because of their hard work, they deserve more from their parents' estates.

Children choosing not to farm may believe that since they did not have a profitable farming operation "handed to them," and must make their own way, they deserve more from their parents' estates.

Frequently, each view is reinforced by a child's spouse who may not fully understand the family's history.

Parents naturally want to be impartial toward their children. Therefore, in order to avoid the appearance of taking sides, or perhaps having to confront these conflicting attitudes, many farmers choose to simply ignore the issue in their estate planning. Rather, they have a very simple Will or no Will at all, either of which means that the estate will be divided among the children "in equal shares".

Even though this approach sounds reasonable, it fails to recognize something which we all know but rarely acknowledge. It is almost impossible to divide anything equally.

Unless an estate is made up entirely of cash or of identical items, equality cannot be achieved.

Imagine you have a 60-acre piece of farm land and three children are to divide it equally. What is equal? Twenty acres each? And if so, which twenty acres? Does the division take into account frontage, access to other property, location of buildings, irrigation needs, or soil quality?

The only apparent way to treat the children equally is to sell the land and divide the proceeds. But even this may not work well. Many times, due to economic conditions, the land would be more valuable if it were held for awhile. On the other hand, a delay in receiving estate proceeds may prevent one of the children from making a once-in-a-lifetime investment.

One thing is clear, if "equality" means that one child will receive the farm under terms which will doom his operation to failure, then everyone will suffer.

In spite of all the talk about equality, what most people are really looking for is fairness. In planning for the final distribution of the family estate, "fairness" means making a reasonable attempt to match individual needs and abilities with available resources. It also means trying to develop a plan as consistent as possible with the goals you hope to achieve if you are still living in 10, 15 or 20 years.

As most simple Wills are structured, there is absolutely no assurance that any of your children will have either the necessary cash or the opportunity to continue the farm operation.

What if . . .

Farm Business Scenario:

Let's say that you are a widow with four children, a 150-acre farm worth $300,000, and $100,000 in other assets. One son wants to farm; the other children do not. If, at the time of your death, you have no Will, or a Will which divides your property equally among your children, each child will be entitled to a one-quarter interest in each of your assets. This means, for example, that the farming son will now own one-fourth of the farm (an ownership value of $75,000). He also has $25,000 in other assets. Even if his brothers and sisters are willing to "trade" assets with him, the most he can hope to end up with is one-third of the farm ($100,000 of the $300,000 value).

Under the best circumstances, this farming son is still a minority owner who is not even legally entitled to exclusive possession of the property. If he wants to buy a majority interest in the farm from his brothers and sisters, he may face some hurdles.

First, the other children are not required to sell to the farming child, and, even if they do, they can name their own sales price.

Second, where is this farming child going to get financing? The days of walking into the bank, shaking hands with your old buddies, and then walking out with a check are long gone. A bank may be very reluctant to make a loan to an untested farmer who only owns a minority interest in the farm.

Even if the child manages to obtain financing, how is this going to affect his ability to profitably operate the farm?

There are no easy, one-size-fits-all answers to these issues. There is usually, however, a workable solution to planning problems which the farmer faces.