Mom and Dad never put together a farm transition plan because it was “too painful to choose who’d get what. Both died this winter. I do the farming, but have two non-farm sisters. What’s the least painful way to solve our predicament, aside of an auction?

Mike Evanish, farm business consultant and manager of Pennsylvania Farm Bureau’s Members’ Service Corp.: I’m sorry to hear you lost both parents in such a short time. But I’m sorrier that they placed the family in such a difficult situation. Your sisters can survive just fine without the farm. But since it’s your livelihood, you can’t. You seem to have more to lose than them at this point, so you must take the lead.

FOR SUCCESS, OR SALE? The outcome of any farm estate transfer with or without defining documents hinges on the next-gen’s family cohesiveness.

Every family situation is different. That means everything I write has to be extremely generic and loaded with assumptions.

One thing’s clear: You (all) need good advice and guidance from a disinterested third party. First, there needs to be an accounting. Your parents’ wills and their estate tax returns should have forced this to happen.

Are there substantial assets? The greater the estate value, the better the chances this can end equitably for everyone. While “equal” is great for your sisters, continuing to farm requires an equitable outcome.

Once asset values are determined, you need a meeting. Clients tell me this was the most difficult meeting in their life. Further, it’s unlikely all three of you have the same desires and goals. Everyone to come is likely looking to “protect what’s theirs.”

This is where the farm’s financial viability becomes so important. With a strong cash flow, the farm will be able to borrow money necessary to buy out the sisters. But even with a strong cash flow, no buy out is possible if the sisters object.

That’s why the meeting is so important. I definitely advise engaging a facilitator to stake out everyone’s positions and possible mutually-acceptable outcomes. The facilitator can be a respected religious leader, a trusted advisor or attorney. In one case, it was a neighbor. Just be sure to look for someone everyone can agree on and can handle this type of family issue.

This doesn’t have to be a fight. And this isn’t something to put off. All three families have needs that deserve to be heard and dealt with.

In my experience, once emotions have cleared, few siblings want to see an auction. If you choose a facilitator well, an outcome everyone can live with will prevail.

Dale Johnson, University of Maryland Extension farm management specialist: With an appraisal of the land, buildings and other property, you can get a loan to buy out your siblings, and pay any estate taxes above the federal and state threshold. But the usual “hitch” is that if your siblings want market value for their share, the farm profit won’t support a high loan payment. That’s the “pain” your parents chose to avoid.

If you have a good relationship with your siblings, they may agree to take rental payments for a few years until you can figure out how to buy them out. If you have a really good relationship, they may understand the work you’ve invested in the farm and sell you their shares at below market value. You may also have building lots that could be sold off to buy them out.

Note to parents: If you don’t have farm transition plan, start developing one today – a business transfer plan and an estate plan. A business transfer plan explains how the business will be transferred. An estate plan explains how assets will be transferred.

Once the business transfer plan takes shape, then you can determine the best way to do so with the help of your lawyer, accountant, insurance agent, etc. It’s often a difficult process – and the main reason for the procrastination you need to overcome.

If you’re procrastinating because “it’s too painful to choose who would get what”, just think of the problems you’re leaving your children when the probate court, following state laws, makes the decisions.

George Mueller, retired dairy farmer from Clifton Springs, N.Y.: The most important thing is to not let money sink a beautiful family relationship. So many families sink into real squabbles over dividing their parent’s estate. Life’s just too short to let this happen.

Be sure that you all can continue to experience the joys of family gatherings down on the farm. It’s really important.

Sit down with your sisters, and have all pledge that family harmony is most important and that the estate will be divided as fairly as you know how.

Ideally, each sibling should receive one-third of your parent’s estate. However, if by staying home on the farm, you’re responsible for a good share of the farm’s success. That fact should be recognized by your sisters.

If you haven’t received any of the business equity in return for your hard work up to now, perhaps it would be most fair if half of the farm business went directly to you, and the other half split three ways between you and your sisters.

An outside mediator that you’re all comfortable should be called in if you suspect serious differences will arise.

If possible, the survival of the farm should be your goal. But even more important is family harmony. Best wishes in solving your predicament.

There’s a lesson here for the rest of us: The child that stays home should have a chance to build equity in the business in return for this dedicated work. Then when the parents die, perhaps half or more of the farm will already in the next generation’s hands.

Glenn Rogers, ag consultant and University of Vermont Extension professor emeritus: Passage of the older generation without a will or trust is a sure method to disrupt a family for years. Ben Franklin said: "Failing to plan is a plan to fail". Don't let it happen to you!

In estates without wills, things are divided equally amongst offspring. However, dividing equally doesn’t mean equitable. The one that’s "on the farm" may well be short changed when most of the equity is tied up in real estate and chattel.

An auction is needed to make it equal amongst all surviving offspring. While it doesn’t disrupt the livelihood of those off the farm, it may mean the one on the farm must incur a huge debt, sell the farm and maybe their home and lose his/her livelihood.

First, inventory estate assets and liabilities, and determine its total net value. Also look at the machinery, the land base, and the infrastructure. Probate will require it anyway.

I encourage folks to look at the annual income / expense, and net income as well as the labor, and external forces. You have to determine if the operation is capable of surviving the transition to the next generation. You need to do this for your banker and to communicate with your siblings.

In any case, keep the communication going between the three of you. Keep the talk professional and respect all points of view. All of you may be at different stages of grief, denial, anger, acceptance and moving on. Respect those differences, and make sure each is "in tune" with the others.

Read up on farm inter-generational transfers and farm estate situations. If not, go to sources such as the Univ. of Minnesota’s Center for Farm Financial Management, Farm Link, Cooperative Extension and Farm Credit. Talk to respected farmers or others. You are not alone in your situation; neither are your siblings.

Communicate! Communicate! Communicate with your siblings and with your own family members. Be open to ideas other than the status quo. Status quo stopped when your parents died. You are in a new "normal" and need to work thru this transition to the next stage of your life.

Find out if Mom and Dad had anything marked or notes left in the desk, on computers, on the wall in the shed, in the hands of your siblings. My guess is they did have a list or lists that weren’t shared with everyone.

Unfortunately, there are often six different lists when one complete list would have been sufficient! But, before you go to probate, find out your siblings’ wishes. Have them write down those wishes, wants and needs surrounding the estate. You may be surprised how easily it may be resolved. Many, if not most, siblings have different wants from their siblings. One sibling from a million-dollar farm estate just wanted the family hutch and its contents – nothing else. She so remembered the incomplete set of cracked dishes and chipped glassware in the rustic hutch. The linens were frayed and soiled. The steel silverware were mixed in with playing cards, crayons, old cookbooks, a phone book with handwritten names/numbers, and other useless items in the drawers. The entire thing was worth maybe $1,500. But that treasure meant more to the daughter than the entire estate, and she wanted her brother to keep farming.

A brother wanted the woods for solitude, for peace, the trees and maple sugaring. He didn't want the dairy, the fields or the equipment even though he worked in the dairy operation. But he never expressed his wishes while Mom and Dad were alive.

The last brother was forever grateful as he wanted to farm. To this day, all are connected knowing that the farm, the woods, the memories, and the heritage, were preserved and each relies on the other to carry on.

Generally, you won’t get everything you want. Accept it. Look at a an equitable solution that may not be equal.

Try to work out compromises so you each ends up with an equitable share that makes everyone happy. It’d be nice if you had years to work this out. Butut the courts, your banker, you and your siblings may have other plans.

Once a farm is broken up, chances are it’ll never be put together again within the family. In a way, everyone loses. If it’s the wish of all parties, try to keep the farm together via innovative ideas, family financing, looking at non-critical portions of the farm being sold, or gifted to siblings. Be open to swapping items, renting, and moving on.

Be aware that your operation may need to change from dairy to field crops, horticulture or another ag business. Be open to combining operations with your siblings to create a farm/non-farm enterprise. Be innovative and open to profitable ideas and keep communication open.

If the above isn’t possible, look at it as an opportunity to start anew, with different challenges, adventures and successes. After all, you’re in a different "normal" now. You are the senior generation, and if you haven't planned for the future for your children, do so now.

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