The fairness question
This is often the hardest part of farm succession: how do you treat all children fairly when one is getting the farm?
Equal division often means selling the farm. If the farm must be divided three ways, the farming child cannot afford to buy out their siblings, and the farm must be sold. This is rarely what the family wants.
The alternative is equivalent value rather than equal division. The farming child gets the farm; other children get value through other means.
Options for non-farming children
Non-farming children can receive equivalent value through various means:
Life Insurance
Parents take out life insurance with non-farming children as beneficiaries. When parents pass, these children receive insurance payouts equivalent to their share.
Other Assets
Investment properties, shares, or other assets outside the farm go to non-farming children.
Cash Payments Over Time
The farming child pays their siblings over time, funded by farm income.
Debt Forgiveness
Parents have lent money to non-farming children (house deposits, education). Forgiving these debts can balance the value equation.
Deferred Trust Distributions
Non-farming children receive their share from the trust later, perhaps when the farm is eventually sold or refinanced.
The sweat equity conversation
The farming child has often worked for years at below-market wages. Should this count toward their share?
- Recognising contribution. Years of work at reduced wages has real value.
- Documenting understandings. What was promised or expected along the way?
- Valuing fairly. How do you put a number on 20 years of farm work?
These conversations are easier with professional facilitation. We help families work through the numbers and emotions together.
Preventing future disputes
The best way to prevent disputes is clear documentation and communication now:
- Document the plan. Written agreements that everyone signs.
- Hold family meetings. Regular communication prevents misunderstandings.
- Manage expectations early. Everyone should understand the plan before parents pass.
"We help families document fair arrangements that all children understand and accept. This reduces the risk of disputes after parents pass away."