Dear Michael: My husband passed away seven years ago. In his will he said our son is able to farm the land until age sixty-five and he could pay the average land rent in our county.  I had a farm contract with him every year, up until two years ago when he made all sorts of excuses not to sign one. For the past four years he has not been honoring the contracts and paying whatever he wants, whenever he wants and this puts me in a financial bind and having to borrow money.  I have a daughter and she, also, feels this is not right, but my son and his wife don’t feel that there is a problem and keep saying, “We are family and we help each other out.”  If I get an attorney, it will make things worse.  This is tearing our family apart.  What do I do?  And how do I make this fair with my estate planning? I would appreciate hearing from you. A taken advantage of mother.

Dear Taken Advantage Of: You stated “in your husband’s will, your son was given the right to farm the land by paying the county average for like land up until age sixty-five.” How was the property owned prior to your husband’s death? If it was in joint tenancy with right of survivor, then all the land went to you and the need to meet the terms of his will would only be in honorarium at best.

Even so, most people do want to honor these terms – legal or otherwise – until someone doesn’t meet these terms – namely your son. I would have an easier time understanding this situation if it had popped up in the last year with the sudden change in prices. But four years ago, paying county average should have led to some tremendous profits in farming – which obviously went to other places than paying Mom her rent. When you have to borrow money to live, then it’s gotten way over the line.

Never the less, a deal is a deal and your son isn’t living up to his end of the deal. However, without bringing a suit against him (hiring an attorney to defend your rights), you only have a few options.

Option one is to explain to your son if he doesn’t want to pay the rent, you’ll advertise the land for rent to the general public. If he doesn’t want to sign a contract, I’m sure there will be many people who will and they’ll make certain, once they have the contract in hand, the rent is paid on time.

Option number two is to pass the land on to your daughter and leave it in her hands to make certain the rent is paid. I don’t think she’d have the same qualms as you do about hiring an attorney to make things right. If your son asks, just say “It’s out of my hands.”

Option three is to put the land up for sale. If the land passed to you via will or by deed, the land is yours to do with what you want. If you put it up for sale, it might wake up Sonny and make him realize he’d better meet his end of the deal. If he gives you a hard time, move away.

The last option is to take the land to your banker, borrow enough money off of it to meet the shortage in rent every year, and when the banker says ‘We have to sell the land” then that’s what will happen – if you live that long.

As far as not burning any bridges, your son, for whatever reason, lit his end of the bridge on fire four years ago when he refused to sign a contract. For some reason, he feels it’s okay for his Mamma to have to go out and borrow money to live. Paying you what he wants or when he wants was never part of the deal and Poppa would come out of his grave if he knew this is what is going on.

Everyone wakes up every morning facing choices. Some choices lead to your betterment in life and some lead to your detriment. But when the choice to do something for your betterment comes at the cost of someone else’s detriment – to the extent your referring to – then it’s time to make the right choices for yourself.

It seems like society has changed. “It’s all good as long as it’s all good for ME – then it’s okay to do whatever you want” seems to be the new mantra. I’m here to tell you that is not right. This country is going the path of many fallen countries when individuals feel like whatever they feel is right for everyone and the heck with what someone else feels. I’m tired of it, the country is tired of it, and the voting recently shows the voters are tired of it. Sorry about your son, but it’s time he woke up and smelled the coffee!

“Keeping the Family Farm in the Family”
Great Plains Diversified Services, Inc.
1424 W. Century Ave., Suite 208
Bismarck, ND 58503-0917
Telephone: 701-255-4079
Fax: 701-255-6106
Toll Free: 1-800-373-4078

Dear Michael: We’ve been farming for many years. We were talking to friends and they mentioned they have a living trust to handle their estate planning. We’ve checked into various trusts – is this the one that protects our estate from long-term care costs? – Living Trust.

Dear Living Trust: In its simplest terms, a living trust is another way for you and your husband to own property together. You have sole ownership – if one of you owns the property. You are allowed to pass your property to whomever you desire during your lifetime. However, if you are married, your spouse may have ‘spousal rights’ to the property upon your death – even if you direct it to someone else. Each state has their own laws regarding ‘spousal rights.’

You have joint tenancy with right of survivorship as another option. This type of ownership means there are two owners and the ‘survivor’ will automatically inherit the property from the first owner’s death. It doesn’t matter what your will states to the contrary, the property is now owned by the survivor. Why? Because joint tenancy WROS states there are two owners and upon death, the one who died is removed from the deed.

People use this type of ownership all the time to pass property between spouses so they don’t incur probate costs. It is, however, a terrible way to own property between non-spouses as the ‘with right of survivor’ means the property will pass to the last owner standing. I’ve come across a few cases were siblings owned property JTWROS and their shocked to find out if one of them dies, their name is just removed from the deed….and so on, and so on until the last person standing owns the property.

Next is tenants in common, and undivided half interest in the property. Undivided means you can’t draw a line down the middle of the property and claim this is your half. However, you can sell, gift or give your tenant in common interest to someone else – even upon your death – again subject to the ‘spousal rights’ in your state. Just because your spouse would automatically get her half of the tenant in common property doesn’t mean she has no right to claim on your estate.

This is the most common way for non-married people to own property. Siblings, business partners, non-related people normally have tenants in common. Now we get into trusts. Trust are either revocable or irrevocable. Revocable trusts (or living trusts) are, as the name states, revocable, changeable, and are merely another method for owning property. Irrevocable trusts cannot be changed once property is deeded to the trust without the consent of the trustee. If you make yourself the trustee, then you have a revocable trust – not an irrevocable one.

An irrevocable trust is a carefully planned ownership designation naming someone as trustee and what rights and duties this trustee will perform as long as the trust owns property. You decide what these rights and duties of the trustee are as a part of the trust. Many irrevocable trusts are found in wills when someone does not want property to go directly to heirs or beneficiaries who must meet the conditions give to the trustee before they receive the assets. Common conditions might be a certain age, a certain life milestone, or an eventual event in their beneficiary’s life. These are testamentary irrevocable trusts.

Other people set up irrevocable trusts to avoid having their assets go to long-term care. These assets must be transferred and free of any ownership rights of the grantors for at least five years before they are not included for Medicaid purposes. Revocable trusts have no protection from long-term care as you can revoke or change them. Medicaid states if you have this right, then you can revoke your trust and pay for your care.

Revocable trusts are also promoted so people tend to believe they will avoid probate, however, in of themselves, they are a tremendously difficult documents to read. Most people name their children as secondary trustees, but not many children are close to being able to handle the fiduciary responsibilities of a trust upon their death. This leads them to hiring an attorney anyway upon death negating all probate savings.

“Keeping the Family Farm in the Family”
Great Plains Diversified Services, Inc.
1424 W. Century Ave., Suite 208
Bismarck, ND 58503-0917
Telephone: 701-255-4079
Fax: 701-255-6106
Toll Free: 1-800-373-4078