Fair deal for siblings in land transfer?

Injuryprone · 08-10-2010 12:29pm #1

I will soon be getting the home farm transferred into my own name. It's an average sized dairy farm that's a bit run down and needs a bit of investment over the coming few years. For the past number of years, I've been doing the majority of the work on the farm part-time as the parents are getting on. My brother and sister have no interest (nor ever had any interest) in the farm.

It's now at the stage where there's talk of the land transfer, and the question of what they should get out of it has come up. Obviously, they are each going to get a site off the land, no problem with that.

My parents are of the view that as well as the sites, I should be paying them as well. My mother thinks that I should lease the land from them (my parents) for 5 years before getting it and they will then divide that cash between my brother and sister. My dad thinks I should get the land now, but that I should pay my brother and sister €4,000 each for the next 30 years:eek:. Obviously I have been a bit taken aback by this, and I get the feeling that they're both overestimating the income that there is off of an average dairy farm (not to mind what it will be in 10 years time!). I do appreciate that I would be getting the dwellinghouse which would be saving me a mortgage etc. which is worth a good bit.

I don't know what (if anything) my brother and sister expect to get out of it.

I would like to find out how other people have dealt with this as I would like to get a fair deal for all sides and I don't want it to look like I'm being selfish or mean or whatever, and I definately don't want to fall out with anyone or have any resentment out there. Any advice would be greatly appreciated.

P.s. I don't even know what the tax implications of any of the above plans are as these are just preliminary informal discussions really.

whelan1 · 08-10-2010 1:34pm

i have gone through all this , some of the suggestions put to me where unreal:eek: felt i should walk away from it.... if you are to pay money to your siblings , what happens if the milk price is crap again , where will you get the money ? i suggest you get a seperate agri advisor/ solicitor to go through the pros and cons tbh if your siblings are getting a site that is enough , why should you have to work to keep them well off:mad: i pay my parents a sum each month - which has been substantially reduced due to the poor income , they know the pressure i am under:rolleyes:... are you under 35 ? i did the lease for 5 years before it was handed over to me ... also you say you wont have a mortgage but if you are paying your parents money it would be like one....

blue5000 · 08-10-2010 1:44pm

How much did the farm make last year? I bet there wasn't enough to be so generous to your brother and sister after everything was paid. A site is enough in my opinion.

whelan1 · 08-10-2010 1:52pm

a major sticking point to be aware of is nursing home fees ... god forbid what happens if one or both of your parents are in a nursing home , they could be there for 20 years :eek: who will pay

kay 9 · 08-10-2010 2:03pm

+1 on above, you will have to pay unless you have the property for 5 years or more in your name.

whelan1 · 08-10-2010 2:48pm

i got a second solicitor to go through everything and it really opened my eyes , the wording of the agreement was very open ... now dont get me wrong i will contribute to my parents care but not to the level of bankruptcy

Belongamick · 08-10-2010 7:40pm

It has been touched on already but not alone are you inheriting the farm but you are inheriting the day to day care of your parents in their golden years. This can be very difficult at times and can be more difficult if you have plans of your own to settle down, build a house next door etc.
My brother in law's situation is a case in point, he lives on the family farm, built a house next door has 4 kids of his own. He runs the farm 50% of the time and has a full time job the other 50%, Both his parents are alive and have had medical issues the past five years. Trips to doctors, hospitals, physio etc are every second day. Top that with an uncle who is terminally ill the past 10 years (medics can't figure out why he is still alive!) who needs help from time to time. To quote my brother in law 'It was the dear site!'.
All other siblings are away and visit ocassionally.
How does this apply to your situation? I would be very reluctant to have to pay any siblings anything for giving them the freedom to do their own thing. You have shown your committment to the farm and your parents welfare over the past few years. We all get on in years over time and not having your parents on their own should provide great peace of mind for all other siblings - without you being there some form of home help would have to be provided and the land would have to be rented.

ihatetractors · 08-10-2010 8:05pm

I'll be in a similar situation in a few years, 3 sisters not an care in the world for the farm. I work it with the auld fella in between my own partime job/college(poor student).

5live · 08-10-2010 8:13pm

If there is anything in life with an almost cast iron guarantee to open cracks in a family into raging chasms it is land transfer. It is great that you are getting the house but will a prospective spouse be willing to move in with your parents and if not will there be enough income to support a mortgage or half a mortgage on a new house? And not alone who is responsible for nursing fees for your parents but, god forbid, funeral fees too. Will your siblings have the right to sell the sites in years to come if they dont build themselves? And will they retain rights of residence on the home? I am not trying to frighten you but these are just some issues on my transfer alone. And paying money for 30 years is not enforceable. The limit is 7 years i believe. But the idea that it came up kind of leads me to believe that your parents believe the farm is there to provide for the children at the expense of the farmer. Sorry if that came out heavily but unless the farm is absouutely huge that is a non runner in my opinion anyway. Congratulations too on joining the ranks of the underappreciated. If you have any questions just ask. There is lots of experience on the forum to help. And the advice on getting advice from a solicitor or even a teagasc advisor who has experience of transfers is sound advice

whelan1 · 08-10-2010 8:40pm

my parents moved to a new bungalow a few hundred yards from the farm house and thankfully are healthy:p but you never know what is round the corner , also every family has at least 1 member who likes to stir crap and they will feel hard done by no matter what

5live · 08-10-2010 8:53pm

Even in families with only one child:D

zetorman · 08-10-2010 8:58pm

If I was you I would forget about the family home. Let your parents keep that and continue to live there and let them dispose of it any way they want when their day is done. I presume you are still single and if you ever marry you will need your own house anyway. If your siblings get a site each its not a bad deal. I would be reluctant to enter into any other type of payment to them. perhaps you could suggest that the family home be willed to them. Good Luck !!

JohnBoy · 08-10-2010 9:50pm

zetorman wrote: »

If I was you I would forget about the family home. Let your parents keep that and continue to live there and let them dispose of it any way they want when their day is done. I presume you are still single and if you ever marry you will need your own house anyway. If your siblings get a site each its not a bad deal. I would be reluctant to enter into any other type of payment to them. perhaps you could suggest that the family home be willed to them. Good Luck !!

totally agree, unless it's a huge farm then the value of a few sites, and the family home probably adds up pretty close to the ag value of the land.

I'm of the opinion that siblings should get their site, and if they want to sell it they should be let do so, if they've no plans to return home it's useless to them otherwise.

If there's to be any annual payments to anyone then imho the only way they should be defined is as a % of post tax profit.

if the farm is making money then fair enough, but if you're struggling, or investing to grow it you cant be paying people a fixed sum.

best of luck with it. and remain calm at all times.

Muckit · 08-10-2010 10:19pm

Hi

I'm quite shocked to hear that it is seems to be common that a son/daughter having inherited a farm has had to pay other siblings a sum of money.....why?

If a sibling gets a good non farming job do they paythey're lesser paid siblings the difference???

I'm prehaps very naive. My father more than told me that the farm is mine when he decides to retire. He's still relatively young so it's a bit down the road. It's a wet farm of some 45acres, so any 'deals' to be done with siblings would cause me to walk away, after transfer fees etc etc I'd have nothing....

Cran · 08-10-2010 10:33pm

Muckit wrote: »

Hi

I'm quite shocked to hear that it is seems to be common that a son/daughter having inherited a farm has had to pay other siblings a sum of money.....why? If a sibling gets a good non farming job do they paythey're lesser paid siblings the difference???

I'm prehaps very naive. My father more than told me that the farm is mine when he decides to retire. He's still relatively young so it's a bit down the road. It's a wet farm of some 45acres, so any 'deals' to be done with siblings would cause me to walk away, after transfer fees etc etc I'd have nothing....

Would agree I was transferred a substantail farm and never was any expectation from my siblings to get anything, each of them got a site alright. But anything else was never in the frame. Find it very strange that people would given money from for something they have no interest in and no input to. ever stranger that theres an expectation to have to provide it...

whelan1 · 09-10-2010 6:30am

are your siblings currently getting 4k a year from your parents ? what profits is your dad making now? I assume your parents put your siblings through college etc if so should they not be contributing to your parents care ? also do your parents have a pension or any other income that will keep them going - like phone masts , rent etc

maidhc · 09-10-2010 12:58pm

Paying anyone 4k a year for 30 years is daft and will finish in the high court. These things need to be sorted once and for all at the point of transfer... if the farm isn't worth getting a 240k mortgage on (8*30), then walk.

If the farm is worth paying €240k for, then get a loan and give it to your parents and see what they do. It is much easier to deal with banks than siblings.

mikemac · 09-10-2010 1:03pm

Similar situation in my home.

One brother is getting the farm, he's welcome to it.
Sure wouldn't it be worse if two or more were looking to get the farm :eek:

The rest of use are getting sites.
I'm extremly happen with a site. God knows the farm doesn't make enough profit to make payments to everyone.

I'm sure it's been raised before but maybe OP, your siblings will take a site instead of money.

A good local solicitor will have seen many cases like yours, there is nearly always disputes. Get some professional advice

Min · 09-10-2010 2:44pm

That all sounds very messy - OP.

If they have no interest they should get nothing apart from a site each and leave it at that, you will have a business to run and you need the money to improve the farm - not waste it on siblings who have no interest or who will not be playing an active part in the farm.

Your parents should think sensibly, do it cleanly, a straight transfer, provisions can be put in for the sites but this €4,000 a year for 30 years times two is simply ridiculous.

I was lucky, my parents gave me the farm and house, with a simply provision that they and my sister had the right to live there, my parents until they die and my sister until she married.
Everything worked out fine and no one complained. I don't get why some families want to make a whole lot of work and build up tensions between family members when it is totally unnecessary.

Your parents should know better and should be trying to make it as easy as possible for you, not be putting a noose around your neck.

Keep it as simple as possible, get the land transferred to you as you don't know what will happen to them in the future, get some simple provisions put in that suits everyone but no way would I pay a sibling €4,000 for nothing, you have to live too.

Good luck with it, I hope reason wins out.

Muckit · 09-10-2010 8:42pm

Min wrote: »

That all sounds very messy - OP.

If they have no interest they should get nothing apart from a site each and leave it at that, you will have a business to run and you need the money to improve the farm - not waste it on siblings who have no interest or who will not be playing an active part in the farm.

Your parents should think sensibly, do it cleanly, a straight transfer, provisions can be put in for the sites but this €4,000 a year for 30 years times two is simply ridiculous.

I was lucky, my parents gave me the farm and house, with a simply provision that they and my sister had the right to live there, my parents until they die and my sister until she married.
Everything worked out fine and no one complained. I don't get why some families want to make a whole lot of work and build up tensions between family members when it is totally unnecessary.

Your parents should know better and should be trying to make it as easy as possible for you, not be putting a noose around your neck.

Keep it as simple as possible, get the land transferred to you as you don't know what will happen to them in the future, get some simple provisions put in that suits everyone but no way would I pay a sibling €4,000 for nothing, you have to live too.

Good luck with it, I hope reason wins out.

Very sound advice indeed;)

Injuryprone · 09-10-2010 11:08pm

Thanks to everyone for all the replies, all much appreciated. Good to hear that I wasn't being irrational in thinking I'd be getting a raw deal. Thanks for all the suggestions, I think the % of profit sounds like a possibility.

Much to mull over over the next while and I'm not actually all that worried about it, as I think it will work out fairly in the end. We do all get on really well and I just think my parents want to do right by all of us and give each of us the best start that they can.

To be fair to my poor dad (his idea is getting an awful lambasting!), there was a bit of logic behind his idea. If he decides to split the farm between the 3 of us and I was to lease the other two-thirds off them (80ac) then it'd imagine it would cost more than 8k/annum. Also I think he was saddled with a payment of around £30k over x no. of years back in the 70's to my uncle....dunno how that compares? Where I think his rational falls down is that the return from farming compared to other industries has changed a bit since then!

Muckit · 10-10-2010 8:17pm

Injuryprone wrote: »

Thanks to everyone for all the replies, all much appreciated. Good to hear that I wasn't being irrational in thinking I'd be getting a raw deal. Thanks for all the suggestions, I think the % of profit sounds like a possibility.

Much to mull over over the next while and I'm not actually all that worried about it, as I think it will work out fairly in the end. We do all get on really well and I just think my parents want to do right by all of us and give each of us the best start that they can.

To be fair to my poor dad (his idea is getting an awful lambasting!), there was a bit of logic behind his idea. If he decides to split the farm between the 3 of us and I was to lease the other two-thirds off them (80ac) then it'd imagine it would cost more than 8k/annum. Also I think he was saddled with a payment of around £30k over x no. of years back in the 70's to my uncle....dunno how that compares? Where I think his rational falls down is that the return from farming compared to other industries has changed a bit since then!

Forget about all these figures and money. It's easy pull figures out of the air or revert to the past which is exactly that..... in the past.

I feel that your father seems to be burdening ye children unnecessarily. It's his farm at the moment so HE needs to step up and decide that if he wants to see it farmed by one of his family in the future that in today's world, only ONE of you can get it. The others get a site. Simple as.

Horace · 10-10-2010 10:38pm

Do you get paid for your "part time" farming right now or is that being taken for granted . Could you talk to both your brother and sister to find out what they want as maybe they have plans to live and work else where , if that is so maybe to pay them the value of a site might suit them much better and they could put a mobile home for holidays on the farm you could charge then a small ground rent that way you be in control of all your holding. im saying this as i know of a family who gave their daughter a site she build a house there as she was working locally but she changed jobs and moved away she rented the house out and its now up for sale the family could end up with god knows who living next to the farmyard all this could have been avoided if they had talked things through a bit at the very least the house should have been build away from the farmyard so i advise you to be carefull where the sites are located within the farm as they may affect your use of the land around the new houses . Also how easy is it to get planning in your area?

maidhc · 10-10-2010 11:08pm

Injuryprone wrote: »

Thanks to everyone for all the replies, all much appreciated. Good to hear that I wasn't being irrational in thinking I'd be getting a raw deal. Thanks for all the suggestions, I think the % of profit sounds like a possibility.

Much to mull over over the next while and I'm not actually all that worried about it, as I think it will work out fairly in the end. We do all get on really well and I just think my parents want to do right by all of us and give each of us the best start that they can.

To be fair to my poor dad (his idea is getting an awful lambasting!), there was a bit of logic behind his idea. If he decides to split the farm between the 3 of us and I was to lease the other two-thirds off them (80ac) then it'd imagine it would cost more than 8k/annum. Also I think he was saddled with a payment of around £30k over x no. of years back in the 70's to my uncle....dunno how that compares? Where I think his rational falls down is that the return from farming compared to other industries has changed a bit since then!

There is a difference (in fact and law) in getting a farm from an uncle as opposed to from parents.
DO NOT get into an annual payment system. It is doomed to fail. (I say this as a solicitor believe it or not!)
If your siblings have never had no interest in the farm, the time when it is being divided is not the time to come to the trough (pardon the pun!).
If your siblings have decent jobs and are catered for, the most logical thing for all concerned is to hand the farm over, perhaps subject to certain conditions in favour of your parents, but that should be it.
If you can get a loan to wash everything out with a lump sum and get clean title, do it.
If you have worked unpaid on the farm in the expectation of getting more than your siblings who did nothing you may have rights.

Shauny2010 · 10-10-2010 11:29pm

I've heard that old siblings argument before, how they've no interest or never did anything on the farm.
I can tell you its a bit much to expect to get a farm for nothing, why not sell it or get it valued then if you want the farm let you pay them off there share.
Be fair not greedy

maidhc · 11-10-2010 10:34am

Shauny2010 wrote: »

I've heard that old siblings argument before, how they've no interest or never did anything on the farm.
I can tell you its a bit much to expect to get a farm for nothing, why not sell it or get it valued then if you want the farm let you pay them off there share.
Be fair not greedy

A farm should be valued according to its earning potential, not its capital value.

jfh · 11-10-2010 11:26am

Forget about all these figures and money. It's easy pull figures out of the air or revert to the past which is exactly that..... in the past.

I feel that your father seems to be burdening ye children unnecessarily. It's his farm at the moment so HE needs to step up and decide that if he wants to see it farmed by one of his family in the future that in today's world, only ONE of you can get it. The others get a site. Simple as.

think Muckit offers very sound advice, think your father needs to take charge of the situation and make decisions. it's all about scalability for the future, you'd have to consider remaining part time if it's split.
you seem to be a rational good natured person and you can see both sides of the problem so hopefully it'll all work out well. at least you get along with the rest of them, that's a big bonus.

Shauny2010 · 11-10-2010 8:05pm

maidhc wrote: »

A farm should be valued according to its earning potential, not its capital value.

Wishful thinking

pakalasa · 11-10-2010 8:24pm

Injuiryprone,

The quicker you sort this out with your Dad the better. Believe me, should your Dad pass away suddenly, things will be 10 times harder with your Mam. Sad to say, but I've been there. It's like dealing with a child at times.:mad:

You do all the work and your siblings, who don't lift a finger get €4k. Reality check Kid!

They should be more than happy with a site.

maidhc · 11-10-2010 8:28pm

Shauny2010 wrote: »

Wishful thinking

That is the view of most Teagasc advisors. Otherwise the farm inevitably has to be sold.

Shauny2010 · 11-10-2010 11:24pm

pakalasa wrote: »

Injuiryprone,

The quicker you sort this out with your Dad the better. Believe me, should your Dad pass away suddenly, things will be 10 times harder with your Mam. Sad to say, but I've been there. It's like dealing with a child at times.:mad:

You do all the work and your siblings, who don't lift a finger get €4k. Reality check Kid!

They should be more than happy with a site.

the old siblings story again

Fair deal for siblings in land transfer?

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