Changing Perceptions on Farm Families

Written by Michael Baron on . Posted in Equalization

Dear Michael: We have two sons who have been farming with us for the past twenty-five plus years and we have three children who left as soon as they could to go on to successful careers. We are approaching our seventies and wanted to set up our estate so the boys on the farm got the farm – via a life estate to protect it from long-term care costs – and the kids off the farm received the other assets as well as a cash payment from the two boys on the farm.

We brought up our plans to all five of our children on the Fourth of July and within minutes the debate was raging over the value of the land today, what the non-farming children were entitled to receive based on current market values, etc. etc. The three non-farming children thought it was unfair the boys on the farm received ‘millions of dollars in real estate’ while they received considerably less than that in non-farm assets as well as a million dollars in life insurance benefits from a life insurance policy the two sons on the farm bought to be ‘fair’ to their siblings. How do you explain to non-farming children that the boys on the farm aren’t receiving ‘millions of dollars’ and their share should be commensurate? – Exasperated Parents.

Dear Exasperated: I’ve had more contentious discussions with non-farm heirs in the past five years than I’ve had in the last thirty regarding ‘what they are owed versus the children who stayed on the farm.’

The history is an evolution of time periods from the Great Depressionists to now the X and Y generations. There’s a reason each generation is given a name because each of these ‘generations’ has its own unique characteristics, lifestyle choices, views on life and the world around them, and how they feel about themselves and what the world either offers or owes them by their having been born into it.

I, like many of my clients, am a Baby Boomer and Baby Boomers were raised by the post-Depression generation. When we were young, prior generations labeled us as the most ‘self-absorbed and selfish’ generation ever seen. Looking at it now, when you talk to Gen X’s and Y’s, you realize Baby Boomers may have been self-absorbed and selfish, but they still believed in the American standard of ‘you get what you earn out of life by hard work.’ You may not have shared as much as prior generations of your wealth, but your wealth was determined by your lifetime body of work.

Gen X and Y’s do not believe that you get what you ‘earn.’ Their viewpoint is ‘Hey, you had me as a child – I didn’t ask to be born and you brought me here – but now that I’m here I want to live the same lifestyle now that took Dad and Mom years to reach regardless of my efforts in my life.’ These children like to buy the brand new house upon marriage, buy the two Cadillac Escalades (one for him and one for her) and, if they get close to losing everything because of mismanagement, Dad and Mom should bail them out. Why? ‘Because we deserve it! You raised me to believe I could have anything I wanted when I was young – with no strings attached (like having to muck out the manure in the barn before you got to go into town for the night) and that’s the lifestyle you taught us – so we’re here to cash that check.’

Everything goes along good as long as the money keeps rolling in and, for the most part, the Gen X and Y’s are paying their own way. That’s good!
What’s bad is when you come to explain to them they won’t be getting an equal share as the children who stayed on the farm and it goes against everything they perceive to be correct in life. They never had to contribute in order to get the things they wanted when they grew up – what does ‘contribution’ have to do with anything when it comes to dividing up the estate?

Granted, a lot of things changed in farming when mechanization took over for hands on labor and farm kids weren’t expected to do as much as they used to because now a machine was doing the work in half the time over the past three decades. But, the non-farm kids don’t see the person running the machine (farming children) to be working as hard as Dad and Mom did when they were young – mostly because Dad didn’t have a Bobcat.
With mechanization, it was a lot easier to let the kids who wanted to be outside, involved in farm work, come out and help and gave the children who didn’t want to be outside so much the opportunity to stay in the house. A job that used to require four or five bodies helping only required one or two. Having more than that – with the machinery involved – actually kind of hindered the process.

In any case, that’s been the evolution for the past thirty years – from post-Depressionists to Baby Boomers to Gen X and Y – each generation has seen modernization and mechanization change the very fabric of day to day life on the family farm.

However, as perceptions have changed, the very nature of the farming industry has not. It’s still about two major inputs – land and labor – just like any business. The perception from the outside, however, from the non-farming children as that farming children do not have to work as hard as their parents – ‘Look, they sit in an air-conditioned cab in a nice tractor all day.’ Therefore, the farming kids are not entitled to as much as they used to be – in the non-farming children’s mind’s eye.

Next article we’ll talk about why that’s true to some extent, but just because the numbers have gotten bigger doesn’t necessarily make the farming children’s life any easier. I’ll give you some ‘suggestions’ for your non-farming children to consider after they tell you what they are owed.

“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

Michael Baron is not an attorney. Information given through written, verbal, or electronic means by Michael Baron or Great Plains Diversified Services, Inc. is not to be construed as legal advice. An attorney, tax advisor, or other registered advisor is needed for the completion of the estate planning process. An attorney must be consulted for legal advice and the drafting of legal documents.