Is It Time To Split Up the Farm?
By Myron Friesen
How do brothers who have accumulated a sizable operation pass on the farm when they are no longer talking and their children have different farming interests?
Submitted by R.R. in Illinois
My brother and I own about 2,000 acres together. We also rent an additional 2,000 acres. Both of us are married and have three children. My son is actively involved in the farming operation, and we’d like to continue expanding what we have already started. I have a good idea of how I can take care of my children who are not farming.
The problem is my brother and his family. He is older than I am and less excited about expanding the operation. His children do not want to farm. Communication is a real problem, and it seems like we can go weeks without talking. We really worked hard together for many years, but it is not working now. Should we just split up the operation now or somehow try to keep it together?
Your question presents some real challenges. Usually, problems like this do not spring up overnight. Erosion is not just a soil issue; communication erosion can destroy a farm.
Together you did a great job of accumulating assets during your farming careers. If you’re not communicating about your day-to-day operation or your future vision for the farm, real trouble could be brewing.
Estate planning between two families who have different objectives could get even more spicy. At this point, I see four options.
- Continue to push the problem under the rug and wait for an explosion. This probably will not end well for either family, especially for your son who wants to continue the operation.
- Define a communication plan that both of you are committed to and establish a workable plan to keep the operation together. The plan needs to include future rental and buyout options.
- Split the operation in half, but attempt to maintain a relationship so that if you want to farm together, you can. Also, develop options to treat current and future generations fairly while giving your son an opportunity to keep the whole farm together in the future.
- Split the operation down the middle and do business separately. This removes some of the need to have a long-term plan, but the short-term challenge of splitting assets could get tense and emotional in a hurry.
While I’m generally not a fan of splitting the farming operation, there is a point where reality sets in, especially if there isn’t any communication and there are different future objectives.
Relationships and goals change, and you have to face reality and be prepared for a split if communication breaks down. Remember, it is only half yours anyway. Splitting assets, especially land, can be very difficult.
There’s no doubt that you have some challenging days ahead of you, and compromise – regardless of the options you choose – will be needed. A spirit of cooperation will help because you may be able to offer your brother some things heading into retirement that could be beneficial to him, and keeping his acres could certainly be beneficial to you.
In situations like this, things can get heated and out of control quickly. Before meeting, remind yourself to keep your cool and to stay calm if your brother gets upset. Losing half of the land in your operation may seem like a real problem, but losing a brother would be worse.
Your Transition Team Members
Myron Friesen is co-owner of Farm Financial Strategies in Osage, Iowa. During the past 15 years, he has worked exclusively with farm families across the Midwest to develop farm transition strategies. Friesen grew up on a Mountain Lake, Minnesota farm. He owns and operates a 620-acre crop and livestock farm with his wife and four children. farmestate.com
Dr. Donald J. Jonovic is founder of Family Business Management Services in Cleveland, Ohio. He focuses on management, growth, and ownership transition issues. familybusinessmgt.com
Jolene Brown is a professional speaker, author, farmer, and family business consultant. Her tested business tools provide leadership and management solutions for the people who feed, clothe, and fuel the world. jolenebrown.com
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