Inheriting Family farm at a cost of $450k

[bigbull338]

ok heres what im seeing now i maybe right or wrong on the deal.but they want the baby brother to shuck out $400,000 to his brother an sister for 40acs.thats bull esp when the nephews an neices are going to get the whole 190acs.if the other 2 are so bent getting the money why dont the nephews an neices borrow the money.an give it to the other 2 an then pay on the loan.

 

[Don87]

This is always a tricky subject, and everyone has experiences either of their own or things they've heard of happening upon someone's death.
First off, I'm sorry for your loss. Second, I'm not a lawyer, nor do I play one on TV. Third, I would suggest to anyone as they age, or their parents age, to do some proper estate planning and get some good advice. Just remember, where ever you go for advice, that party usually has some interests of their own. Go to a lawyer who specializes in trusts, and guess what, you've got a new trust. Go to a financial planner that works for an equity firm or bank, and guess what type of account you now have.

The best way to distribute ones estate is by giving it away before you die. No inheritance tax to burden those getting money. Real property can be deeded over to a family member quite easily in most states. The person can distribute their accumulated wealth as they see fit. The time to do estate planning isn't after the second heart attack!

So to those reading this, do a little research. Look up IRS rules on exempt gifts, lifetime exclusion, and seven year lookback. It's ridiculous to die in this day and age and leave considerable assets to a will.

Best of wishes and good luck.

This is the best advice to anyone reading this forum, and is aging. In cases where you can't 'give it as a gift', you can sometimes sell it to them for a dollar. That way no one is stuck with a half-mil tax bill or anything.

While that proposal won't help with this case, it will with others.

For this case 'common sense' needs to prevail.........doesn't matter if ya talk to 'em, or beat some sense into 'em , but someone with common sense has to get through to someone there.

In my opinion(and that's all it is), the uncle in this case should be well taken care of..........because he sacrificed a lot, for the 'now deceased person'.

 

[MWRR]

Not exactly on subject but is related. When a couple is meeting with their attorney/tax advisor in preparing a will or transfer plans for the family farm should we include our children in the meeting?

 

[two_bit_score]

This is the best advice to anyone reading this forum, and is aging. In cases where you can't 'give it as a gift', you can sometimes sell it to them for a dollar. That way no one is stuck with a half-mil tax bill or anything.

While that proposal won't help with this case, it will with others.

For this case 'common sense' needs to prevail.........doesn't matter if ya talk to 'em, or beat some sense into 'em , but someone with common sense has to get through to someone there.

In my opinion(and that's all it is), the uncle in this case should be well taken care of..........because he sacrificed a lot, for the 'now deceased person'.

Best advice would be to include life insurance into your tax calculations. It makes it a lot easier to pay estate taxes when you have sufficient life insurance. I DO NOT sell insurance.

 

[Don87]

Best advice would be to include life insurance into your tax calculations. It makes it a lot easier to pay estate taxes when you have sufficient life insurance. I DO NOT sell insurance.

That's the part of what you typed that I didn't fully understand...........and still don't apparently. How is the grandfathers life insurance, going to pay the Uncle's 450,000 dollar inheritance tax bill?
Unless the grandfather named the Uncle as the beneficiary.............??

 

[two_bit_score]

That's the part of what you typed that I didn't fully understand...........and still don't apparently. How is the grandfathers life insurance, going to pay the Uncle's 450,000 dollar inheritance tax bill?
Unless the grandfather named the Uncle as the beneficiary.............??

Lots of ways cash can be used to pay bills. Many people take out term insurance specifically for estate tax purposes. Your insurance or financial advisor can explain everything in detail.

You might want to reconsider how the Uncle has a 450,000 estate tax bill. IMHO opinion he does not, necessarily.

 

[MHarryE]

Grandpa's wishes that the property never leaves the family is unreasonable unless everyone in the family feels the same way. My wife's father felt the same way but he passed away in December. The last time he and my wife's grandma updated their will was in 1972. Six months before he passed away the whole family sat down to listen to grandma and grandpa's wishes. Nothing written. While grandpa was in hospice grandma ad what tests showed to be her third major stroke. She can no longer convey her wishes because her mind is now about 3 year old level. The answer is to never let things lie until they get to this situation. If it is law, the redistribution of land using that as equity to pay seems most reasonable. In all practicality selling the whole thing and splitting the money seems most fair as the proceeds should cover younger uncles's future needs as I take it he earned his living from the farm. One of my best friends split up his farm giving each of his daughters what he felt they deserved based entirely on birth order. He too wanted the land to stay in the family. He passed away in October. The farm has now been liquidated with the girls splitting the proceeds equally. Dad's wishes went out the door with the reality that life must go on with fairness to all. Dad would not have wanted his kids to never talk to each other again over a misjudgment he made.

 

[newbury]

<snip> the reality that life must go on with fairness to all. Dad would not have wanted his kids to never talk to each other again over a misjudgment he made.

I've seen too many cases in my wifes family where "fairness to all" in distribution of assets would be fairness to none.

There has been several cases of a sibling or siblings making a life choice to stay near and assist an ailing family member for decades, while other siblings went off to the world squandering any expected inheritance, rarely even sending a birthday card. Often after "Dad" had written the will and lapsed into old age fog and didn't realize what was happening but lived for many years later.

When time came to split up the estates my wife, along with the other executors, would tend to "reward" the loyal siblings. This eventually led to some factions not speaking to each other. The general attitude of the "loyal dedicated" faction is TOUGH. But that's good family politics. Hopefully it teaches the young 'uns that if you want to be remembered support your family.

They (I guess after 30 years it's now "we") tend to operate as family first. Long ago SWMBO made the choice that we will retire to be near her mother for support when her mother needs it. Would that be my first choice - NO - but it's FAMILY.

 

[riptides]

Good advice in this thread.

One tidbit, sometimes it is difficult to see "fair" when talking about family members that have been out of the picture for years or decade reappearing with the "hand out" mentality.

Face it, they are in the picture now for a reason, and their history is really between them, and the deceased.