Farm - Estate

[KentuckyWildcat]

Tips and options on how to preserve the farm so the parents can pass it down to me, my brother, and/or my kids.

Me: Married with two kids
Brother: Not married no kids

I've tried to get mom to sign it over to me or my brother. Or both...Neither of us care, we both just want to keep it in the family. We have been the ones taking care of it the last 30+ years.

I think mom won't sign it over to me because I'm married. Probably afraid she could get half if something happened.

Probably worried about my brother for losing income/insurance. As he may be on disability eventually.

Trust? Sign it over? Put it in my kids name with me overseeing it until they are older?

[KSRBEvans]

Mom should talk to an estate planning attorney (sorry). There are a variety of issues here that may need some advanced planning. For example, "signing it over" to the sons has some potential disadvantages and possible tax implications, and whatever plan Mom ends up with may want to include a special needs trust for anything Mom wants your brother to receive.Those are just a couple (and this is not legal advice! )

[CitizenBBN]

Definitely need a good planning attorney/cpa/both. BEvans 100% right of course.

I will say the following, with disclosure I work with estates and living estates every day but I am not one of the above:

1. Lots of parents hate the idea of losing "control" or ownership over assets, even if that's a good idea. The emotional here is often harder than the legal. It's not just a matter of trust, but of "giving up" something they have, etc. Not all, but a lot of them.

2. Enter the trust. This is overall an excellent method for dealing with both the emotional and legal issues. It is not for everything, but there are a lot of options here. It is the go-to for preserving a lot of assets in my experience, but the details of what kind (revocable, non-revocable, etc.) and the details are nearly endless.

3. there are a LOT of legal issues in these situations, no way around it. Medicaid issues, which kind of trust issues, avoiding tax issues, you name it. It's a specialized practice for a reason. A big one I face for people is the medicaid issue and the well known but not completely accurate '5 year' rule. That's just one tiny example.

4. Be careful about "sharing" it in a direct way instead of through an entity (trust, LLC, inc). Have some experience with this, where property is willed to multiple people over generations and you look up and there is no agreement on how to do anything and everyone owns 1/16th or something. You get deadlock.

You can share it through an entity with voting rights and rules for how to deal with maintenance, succession, etc. Do that IMO.

I strongly recommend some kind of entity here based on the info you've given. It can address succession and maintenance plans, deal with tax issues, etc. much better than just transferring ownership. That can be inside or outside of a trust.

But you'll need sound advice on the hairy aspects of making that happen.

That's my .02, which is really just to a) look at an entity structure versus deeding to one person, and b) hammer out the details with a professional who knows these pretty awkward rules. There are entire buildings full of planning people to work on these huge estates for a reason. It can get messy.

[Darrell KSR]

Yeah, good advice already in this thread. Find a competent estate planning attorney who works with a good CPA to discuss these issues. You usually don't want to transfer during lifetime for capital gains and basis reasons (throws away a great step-up in basis opportunity), but there can be mitigating circumstances for that, too (medicaid eligibility, long-term care), although I find that to usually be not a great reason either.

Using a pourover will and revocable trust and transferring all assets, depending on the state/jurisdiction, can be a very effective manner of transferring to the loved ones at death simply and without probate issues, avoiding creditor claims, and insuring simplicity of transfer. You can even include possible spendthrift issues or special needs issues in the trust at the same time.

There's no one-size fits all answer here without a thorough, in depth review with the family/owners/testators/trust grantors of all of the objectives, current assets, income, expenses, and objectives, though. I counsel clients that estate planning is a process, not a "picking something off a shelf" shopping excursion. It should be a service, rather than a product.

[CitizenBBN]

We went with a revocable trust at death for some things in case both wife and I pass simultaneously, but my needs are sadly simple, lol. I was thinking of something like that here, with the trust encompassing the succession through trusteeship rules, and directives for maintenance of assets, etc.

Lots of options of course, and if there is one truth of working with estates it is that there is not one solution nor anything that is very "off the shelf". Wish there were. I tell people I have a toolbox full of tools for my part of it and I'll have to pick the right tools for each job as no two are exactly the same, and that's not even the legal stuff.

One odd side note in Kentucky, and this MIGHT apply to you in that case, and even a LOT of estate attorneys get this one wrong: titled vehicles do NOT pass through at death to that trust,even if it is in the agreements for them to do so. Kentucky DVM will NOT take that title and, upon presentation of those documents, put that vehicle in a trust or other entity at death. You have to get a judicial order or open an estate or transfer them before death pretty much.

I mention that in case the farm or your mom have assets like a titled trailer or any titled vehicle. One way around that is to move them to a new entity prior to death, and then the ownership of that entity can be transferred I believe.

I have had multiple vehicles in that situation. It's not the end of the world, but it does require filing proper motions to get them "un-stuck".

[CitizenBBN]

Can I chime in another thought here? This may become my core dump of estate stuff, lol.

In either a trust or estate, etc., do NOT have multiple co-equal administrators IMO. Maybe if you have two family members who get along great OK, but I see far more of these go poorly than go well. More than 2 is usually at a minimum cumbersome and often gridlock.

In fairness most that I do are fine, but I run into enough that go badly to not recommend it in most cases. I have done a number of estates where the gridlock gets bad enough the judge orders them all removed and appoints the public administrator. Usually that's not a bad idea for the estate, a professional then handles things, but you will lose all say over things.

Just my .02. I get why they are done, and if everyone gets along great then wonderful.

But I see them done with the idea of forcing people who don't like each other to finally bury the hatchet and work together. Have never seen one of those go well.

[bigsky]

Yes, this is off topic a bit

I'm an advocate for conservation easements on ag property as part of estate planning. I advocated for and got passed, along with many others, two bond issues and a permanent levy to finance the county buying out the development rights of ag property. This preserves agriculture as part of the culture of the county. It allows the money paid for the development rights to be used for estate planning especially to buy out heirs who are not interesting in farming or ranching.

In Gallatin county Montana an executor who has a farm or ranch included in an estate would be required to sell to a developer as part of getting the highest value for the heirs.

And it's not medieval zoning that tells the owners that their parents were farmers and their grandparents were farmers so they have to be farmers too. Instead, willing buyers and sellers solve the conservation, culture and inheritance issues.

[Darrell KSR]

Can I chime in another thought here? This may become my core dump of estate stuff, lol.

In either a trust or estate, etc., do NOT have multiple co-equal administrators IMO. Maybe if you have two family members who get along great OK, but I see far more of these go poorly than go well. More than 2 is usually at a minimum cumbersome and often gridlock.

In fairness most that I do are fine, but I run into enough that go badly to not recommend it in most cases. I have done a number of estates where the gridlock gets bad enough the judge orders them all removed and appoints the public administrator. Usually that's not a bad idea for the estate, a professional then handles things, but you will lose all say over things.

Just my .02. I get why they are done, and if everyone gets along great then wonderful.

But I see them done with the idea of forcing people who don't like each other to finally bury the hatchet and work together. Have never seen one of those go well.

I'll pay your Moscow Mule bar tab for a year...err, make that a month if you could sit in on client meetings with me.

Alabama law permits even co-agents under a durable power of attorney to act for the principal, even independently of each other. Talk about a nightmare when one goes to a bank or financial institution with their directives, and the other goes with the opposite. Nightmare city.

I work very hard to keep that situation from existing with co-fiduciaries of any type, but I am often called in after the fact and have to deal with the mess. You're right, "usually" or most times, it works out. But it's not worth the headaches when it doesn't.

And I'd go so far as to say that even includes family members who get along famously. They often do--until they don't.

I try to be creative and finesse it as much as possible. Usually the only reason for doing it is that parents don't want to hurt child's feelings, even when there is a clear and obvious preferred fiduciary. My solution is to give the non-financial prudent child(ren) other tasks, such as a health care proxy, or agent under a funeral and burial instructions document. Or if it's the eldest child that is the obvious choice, encourage the testator/grantor/principal to allow me to include language that they are imposing the "burden" of that position on the eldest child, but request that they consult with the other siblings, or something like that.

It's like arguing with somebody who says they've run across an interstate and not been hit by a car, so it must be ok. It always is ok. Until it's not.

[KSRBEvans]

Dave Ramsey often says, "Anything with 2 heads is a monster." I used to use that line when I was trying to discourage clients from naming co-fiduciaries.

[Catonahottinroof]

In the process of this now with my parents, my dad has limited time left. Elder law is on the situation sorting out our path forward currently

[KentuckyWildcat]

I knew nothing about this process before this thread....I have learned that I know less than I thought....

My brother and I, not worried at all about us splitting it or one or the other taking all of it. We have the same goal. Work it, save it, retain it, die here, pass it down. Been the goal since we were kids.

My daughters in 20 years? Not so sure they will work as well together as we do...

[CitizenBBN]

My daughters in 20 years? Not so sure they will work as well together as we do...

That's where the rub starts.

I have a property right now, different situation, but one where two family members built two houses and put in a shared driveway somewhere close to the shared property line.

Worked great as long as family owned both properties and everyone got along great. Now one house needs to be sold, but there's no survey and no one knows who owns what part of the drive, and there's no easement rights or maintenance agreement etc.

Wasn't needed so long as everyone got along, but selling outside the family it is a) the first question that will be asked of a buyer, and it will impact the value, and b) it could be to the detriment of the other family member depending on who owns what.

Even though they were family, ideally they would have put that in place legally much earlier in the process. Then you have no issues and everyone was able to participate and agree on how to handle that eventuality.

We can take care of it, this isn't a big deal, but it's an example of how planning needs to not be about the situation where everyone is in agreement and gets along, it's about when people (family) don't agree and there is no mechanism to resolve those issues. In your case let's say it comes to a head and the two future heirs just say "to hell with this, we're selling it" or one of them forces the sale (could happen)?

If you lay out now how you want everything done you can deal with that up front while you and your brother can make those decisions. If it's a blank slate for them it could actually cause strife not solve it, and certainly could veer away from your wishes.

One last caveat: Sometimes part of that is soberly looking at the fact that your current wishes may become a real bind for later generations. I've run into that too, where the trust was set up with rules that just didn't work for the family, in an effort to shoehorn them into something later generations simply didn't want.

All things to consider, but that's why you go meet with good planning professionals and pay the bill. It avoids a lot of headaches and the process itself will help to draw those things into focus. Just my .02.

[MickintheHam]

This link from the House Ways and Means Committee could be helpful. It describes how the Big Beautiful Bill would impact family farms. If passed as written and signed into law there are major changes for families.

https://waysandmeans.house.gov/2025/...eautiful-bill/