Does anyone else have any farm inheritance drama or stories?
I have some that I posted maybe ~40 pages back. Here's the simplified version to keep it short.
My grandfather had three kids and three pieces of property. He had 2x cattle ranches in CA that are about 200 acres each and a house in the local city. Instead of giving one property to each child, every property got split 3 ways.
Now my mom lives in the house and her brothers live on a ranch of their own. Since it's jointly owned, they all pay rent to each other and pay out ranch income. I've never figured out how they allocate income since it's technically owned 1/3 each way, but each ranch has one person doing all the labor. I know the ranches don't make much money.
About a decade ago, the family enters into a business deal to sell a conservation easement on a separate property owned by one brothers second wife. No one ever told me the full story, but I know that somehow my mom now owns half of this new property and the new wife sued the other brother over the deal. Being ranchers, no one ever talked about this. They just stopped talking to each other. Yet they still pay each other rent.
I'm now set to inherit 1/6 of each property eventually. I've talked to my mom about changing it so that me and my brother can inherit the house and our cousins can inherit the property that their parents live on. Unfortunately my mom has zero interest in this. She enjoys having a partial ownership stake in the ranch.
I'm not sure what I'll do when I inherit this mess. I have zero interest in owning a 1/6 stake in a ranch. None of the other family members have the funds to buy anyone else out. I also remain irrationally angry at one of my uncles over a property purchase I tried to make from the family (this is a different story). Part of me wants to force a sale of something just to get out of it. But I know this would destroy my relationship with all of my uncles and cousins.
One of the reasons we want to do all this legal stuff is that people would not be inheriting partial ownership of LAND, they would be inheriting partial ownership of a corporation. That way, no one can force anyone to sell. They would be able to sell to outsiders as long as no family members would meet the price. That way, they can get their money out if they want to. At some point folks may decide it's better to sell the entire corporation to some mega-corporation because it's not worth the hassle. Right now, my 1/3rd and 1/2 share is worth $20k to $25k a year. (I budget for $20k in my income projections.)
I was an only child. My mom's siblings each had 3 kids, so their share would be 1/9th and 1/6th (or 1/9th and 0/6ths). Two more generations and it won't be that much money per share. Except in my branch of the family; my daughter will inherit the income rights but my son will inherit my share of the farm, so it will take another generation before my share gets diluted 3 ways (3 grandkids).
$6-8k is still solid money to help middle class folks jump-start their savings or their schooling.
When you get down to $1k or $2k, not so much. At that point it probably won't be worth a family member's time to manage things for everyone else and it would make far more sense to sell.
As for me, I like having a source of income that's in the $20k to $25k range that's uncorrelated to stocks, bonds, social security or rental houses in a different state. :) And for that I have my grand parents to thank for it. They were smart, hardworking, good hearted folks who passed that on to their kids. They didn't have much money during the depression but they made it thru with their farm intact.
My grandfather was very smart fellow. The local mill and grain silo company had been in the same local family for some generations. Millers tend to be wealthier than farmers because they get a cut of all the farmer's income. I don't know how much you know about small town or small rural areas. It's not uncommon for someone really hard-working and sharp to make a lot of money and become important in their small area. Their kids partially grew up as regular kids so they have a lot of the traits their parents have. But the 3rd and 4th generation are often ignorant, lazy and feel more entitled than the mythical Reagan welfare queen. They grow up being "important people" and never really have to develop their abilities to provide for themselves. Once they take over they often run the business into the ground and spend themselves broke.
The millers in that area were in the 3rd or 4th generation and had all the bad qualities I just described. My grandfather had received a very large check from them for his grain (minus their cut for the work, of course). The check bounced.
Because he paid attention and knew people, he found out that other checks had bounced. This is back before computers checked the balance right away, etc. So if you needed a bit of float in your account, you could play some games. Let's say the millers had $10,000 in their account. If they wrote an $11,000 check it would bounce, but it looked to whomever was processing it to be a simple mistake instead of a fraudulent check. If they wrote several such checks, each would look, to whichever teller processed it, to be a simple mistake.
My grandfather realized that there were more serious problems than just a simple oops. So he went to the bank and asked how much they had in the bank account. His feeling was that $10,000 out of $11,000 was better than $0 out of $11,000, so maybe he could just get what they had instead of what they owed. The bank teller shook her head no and explained they weren't allowed to reveal that information.
My grandfather thought for a moment, then asked, "If I were to deposit $100 in the account, would there be enough to cash this check?"
The teller looked at him, thought about the rules, and said, "No--o--o--o--o..."
"How about $200?"
A few hundred dollars deposited into their account later, he walked out with as much of his money as they had. Other folks ended up getting bupkis.
