Inheriting Family farm at a cost of $450k

[two_bit_score]

Compost, I doubt your uncle is legally required to accept everything conveyed under the will. IOW, he may be able to simply accept his house and land conveyed to him and refuse the other acreage and leave it up to the other heirs to dispose of it how they wish.

I wonder if their acreage is properly portioned or if they have an undivided interest. It could work out for Uncle to just leave things alone to see what develops.

Of course amicable resolutions like I described above is best.

One suggestion: buy life insurance to pay anticipated inheritance taxes.

 

[compostcowmanure]

I think this is pretty simple, actually, if inheritances ever are.

The young uncle should just agree on paper that the other two convey their property to him in exchange for his life estate and upon his death the entire parcel conveys to them and their heirs.

As long as all parties would agree I think some form of this would work. He would get access and lifetime control to the property w/o an out lay of a large sum and they would have the money already conveyed in the will.

Yet another wise post!
Is there a great way of printing all of this thread out plainly?
I plan to see Mom tonight & she'd really be happy to hear all of these excellent suggestions.

 

[Ken]

I think this is pretty simple, actually, if inheritances ever are.

The young uncle should just agree on paper that the other two convey their property to him in exchange for his life estate and upon his death the entire parcel conveys to them and their heirs.

As long as all parties would agree I think some form of this would work. He would get access and lifetime control to the property w/o an out lay of a large sum and they would have the money already conveyed in the will.

Even with a will or inheritance planly written and explained . Those that are going to receive the gift will grab theirs then look at the others to see if favortism has taken place.

My Father owned 160 acres and 20 years before his Llife Estate was made out I had purchased 40 acres.So remainder was 120 acres to be divided equally with written map of who gets where. Because we took care of him the last 8 remaining years of his life with very few visits of the Grand kids to receive a porporned share of the property. I paid the Survey and taxes and distubation of the property as directed.

Then the grumbleing begain They could figure Arith. and I received more than they. I received 40. Sister
received 40 and they together received 40 to be divided 4 ways. or 10 acre each. 160 -120 doesn't come out equal and so I stole the part that had purchased 20 years earlier. They to this day will not accept a lawyers explaination of the division . so nothing is resolved And the olive branch has withered.

Knowing this should have done as Dad wanted was to leave them out totally. But being fair wasn't a good decision after all. (No good turn will go unpunished if money is involved.)

 

[rmorey]

As I understand the first post, Dad wanted an equal split between all three children. I think he idea of a corporation or LLC make a lot f sense. Split the cash 3 ways ($133k each) and equal shares of the property trust however it gets structured. That way nobody owes and nobody pays. Compensating uncle for staying is not required, he chose to stay.

 

[pnhd65]

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.

 

[ultrarunner]

It's these kinds of posts that make TBN much more than a tractor site...

Lots of wisdom born from practical experience on these pages.

My understanding is those that inherit have some latitude if they all agree...

I've seen situations where family members relinquished all rights because another family member put out all the effort with aging parents or keeping the land viable.

Currently, both parents of a very good friend recently passed away...

The parents bought new a 2,000 square foot tract home near San Jose in 1958...

The parents also paid for law school for the son at great expense at the time changed the will to leave the daughter the house which was worth about the same as law school expenses.

Fast forward to 2013 and the home just sold for 1.3 million... daughter is sharing the windfall with her nephew and niece from her brother... every one's happy...

 

[kneedeep]

A life lesson here-

If you have property and/or money that will be left to children, make sure a will is in place that clearly states your intentions of how AND why things are being distributed. Being fair may not mean equal.
I have one son so my will is short and sweet while there a 4 boys in my family and the bickering is already under way even though parents are still alive and somewhat healthy. Myself and youngest brother are only concerned with parents living peacefully as long as god is willing while 2 middle brothers are trying to 'get' what they think is their share now. A will is in place and there are going to be some unhappy campers, but mom and dad have made their minds up and its fair but NOT equal.

I dread the day.

 

[jerrybob]

Isn't it a shame families become so vicious when money is involved. Seen it many times.......brothers, sisters, relatives just turn on one another.......they come out of the woodwork because they're entitled to that money! Took care of my step-father for many years before he died.....his last few years were really hard. He didn't have much money but two of his nephews called asking if they were getting anything. These two nephews hadn't seen my dad for 15 years....never called....never sent a birthday card....but they sure had their hands out when they heard he died.....a couple of leeches from my perspective. A shame what money does to some people!:2cents:

 

[Soapandbacon]

It pays to keep one's Will updated. It's too bad the grandfather had such good intentions, by the sounds of it, and it isn't turning out that way.

If your Mom and her sibling forgive Uncle Mike the $450K, is that legally a gift which would be taxable? I think the tax-free gift limit is $13K per year, or if your father is a joint owner, he and your Mom can give $13K each tax-free.

I think the first thing needed is an equitable family agreement, then a lawyer who knows how to implement that to avoid taxes. I'm sorry, but I can't agree with your Mom's concept that that is what the law demands. It was given to her and she can now do whatever she wants with it, including helping Uncle Mike out.

I agree with Dave , your mom's concept is flawed....use common sense ....

 

[randy41]

sorry for not reading all the posts and someone may have already suggested this but it looks like to me that the income the farm realizes would cover the mortgage payments on 450k and throw off some cash flow. maybe your mom and the older bro could finance it for him with some of that 200k of investments and see a better return on their money than what the the money is invested in now. it also looks like the estate is > 5 million and there may be some estate tax issues.