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Brothers farming together

Problem submitted by C.B. , Illinois

For over 15 years, my two brothers and I have worked with
our dad, farming land we rent from him, as well as land we each own
independently. Like lots of other farmers, we’ve also complicated the situation
by owning equipment separately and by sharing it when needed.

Basically, we help each other. But labor sharing isn’t
always equal (a source of friction) because each of us is a part-time farmer
with a full-time job off the farm.

This has worked OK over the years except (and I’m sure you
see this coming) Dad’s health is now starting to fail. My brothers and I know
it won’t be long before he won’t be able to farm anymore.

Losing Dad’s input will be hard, and we hate to see our
strong father becoming frail. But I’m afraid we also face some larger,
long-term problems.

We haven’t talked about this (we don’t talk much about
anything to do with the future), but the fact is we all protect our
independence. We like to do things our way and never worry about who owes who
what (at least not on the surface).

I can see there are more efficient ways to manage all this,
but we’re stubborn, and we’ve buried a few things. How do we start now to work
together?

And that’s not the only question. What may be even more
serious is the fact that none of us – particularly Dad – has done a will or an
estate plan. Dad alone owns 1,100 acres, buildings, and a lot of equipment. We
need to do something to make sure death taxes don’t shut us down altogether.
How do we start that without seeming greedy or uncaring about Dad’s failing
health?

Dr. Jonovic’s Solution 

Most of us know the feeling of never doing the difficult
thing today that can easily be put off till tomorrow. C.B.’s family accepts OK
because it gets them through, avoiding hard decisions and the pressure of
sorting things out.

C.B. and his brothers must take the first step before laying
any of this burden on their father. But first, the facts.

They don’t have a partnership. They have a farming pickup
game of HORSE. They don’t have a business. They have day jobs and play in a
weekend band with a loose groove. They’re not investors. They’re part-time
members in an agricultural commune. Now the potential loss of Dad and the gain
of family land has blown in like a freak blizzard. It’s time to enter the adult
world and treat the farm like a business.

Inheriting Dad’s 1,100 acres will either make them a real
farm operation or it will just mean financial benefit and security. Only they
can decide which it will be.

Do all or any of them want to be full-time farmers? Or do
they want to keep their day jobs and rent out Dad’s land?

If they decide to farm, they’ll finally have to address all
those annoying details of living in a business partnership. Who will take
overall responsibility and be given decision-making authority? What will be the
corresponding pay? (That same someone will probably have to surrender his day
job.) How will they use and reimburse capital and equipment? How will they
distribute profits?

Answers to those questions and how C.B. and his brothers
might meet the estate-planning challenges will be discussed in the Mid-March
column.

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