Bass Reeves wrote: » I am posting on the present senario on this thread not any other senario's. Her parent have put there cards on the table. Nobody has made a life time commitment
Treppen wrote: » So you could be potentially be paying out maybe 400k +All your own work/money/time put into it after the will is enacted. +All the work put into it, for at least 20 years prior to inheritance. To get a farm worth maybe 550k + Potential of getting 10k profit per year while paying of the brothers. +Maybe a house Am I reading that right. Would there be tax implications?
Treppen wrote: » Am I reading that right. Would there be tax implications?
Bass Reeves wrote: » An 80 acre drystock farm is no longer capable of supporting a family full stop. It is not a fulltime unit either. A drystock farm of that size and even double it is capable of being run in 15-20 hours/week. Anybody on such a farm unit can hold down another job the question is can you pony up money to siblings. Let look at this situation the parents have a bungalow that will come into play and the daughter is working in a profession career somewhere in the accountancy/financial sector it seems. She is not intending to give up this career but looking to move back and work and farm from home with her possible partner. Likes attract so more than likely he is in the same career pay bracket. There wages will set up a home either on the farm or where they live now, they will access a site on the farm so unless they intend to build a big f@@koff house they will have a modest mortgage. With or without the farm they will have an decent lifstyle. However the farm is an asset in the 550-600K bracket. What income is a farm of that size capable of throwing free. SFP on such a drystock farm would be in the 8-10k minimum rage, ANC is 2500, Enviormental plans look being back in vogue but at present are worth about 5K . So paynents are about 16-18K. This farm seemed to have been capable of raising a family in the not too distant past so it must be a fairly decent land. Such a farm is capable if farmed as a business of throwing 15-20 profit a year. All in all with payments it capable of throwing 30k+ in free cash ever year. Repayments on 300K over 20 years at 4%( and if she is in the accountancy/financial sector she will beat that by at least 1%) is 21K/year. At the end of 20 year you own the farm.Its 1750/month. It doable, I know I have done it in similar circumstances, and I had to build every shed on the place, fence it, buy every bit of machinery and stock it. It a business not a some precious entity.
Treppen wrote: » I agree, also there is the fact that these calculations are based on what happens AFTER the inheritance. The friend of the OP has been working this farm for a good while now AND will be continuing to keep this farm going up until the Will is enacted. That could be another 20 years. If you worked in McDonalds 1 day a week for those 20 years, you'd be financially better off when it was going to be split anyway down the line. You have to take into account income foregone when planning to make an investment of your time ...for 20+ years:eek: Basically at the moment the Op's friend is just providing free labour for their Father's hobby. What extra amount will this free labour yield at the other end, after a long journey of hope?
maidhc wrote: » 80 acres can't make a sufficient profit to feed a family and repay for itself anymore than a 20 or 30 acres can. In fact I think no size farm can make a profit and also make repayments on anything approaching a fraction of the value of the land.
skooterblue2 wrote: » Not all landlords are the same. Some have been very progressive and diversified into industry like brewing, soccer, mining, arments and changed from estate farming with tenants to diverse corporations in the last century. Some have been very progressive and others have been absentee. I see my own uncles, only getting a second tractor in the 1990's and Slatted units in the same time. They never grasped that time is money.
joeguevara wrote: » Yes you are probably right. But I doubt so young. Maybe I am wrong. But no way would I handover my most valuable asset to someone who basically has no real experience in ownership. I would have a strategic plan with specific milestones that need to be reached and particular areas of expertise that is required to be learned over a certain period. Nobody should say nothing but come in, take the deeds and bellow arrivederci.
Bass Reeves wrote: » What amazes me us the amount of people that consider that an eighty acres farm of what seems to be fairly good land is unable to turn a profit to justify a buyout as part of the solution.
Bentlee Kind Teapot wrote: » Sure pretty much every farm is passed on to a person with no prior ownership experience.
jaymla627 wrote: » Unless its a turn key dairy farm been bought out fully stocked and kitted out needing no money spent,no other farming enterprise could pay market value for buy-out to siblings.... For arguements sake if a 500k loan was taken out over 25 years to faciliate "paying of, off siblings" 32000 a year would need to be found to meet repayments, but once intrest is payed down and principal repayments are been made the farm will need to be making a 50k plus profit to meet the 32k repayments as the taxman needs his cut, and then if a modest salary was taken of say 20k for the poor unfortunate servicing the loan a clear profit of over 75k a year needs to be made.... A lot of farms not dairying farming 80 acres would do well to have gross sales of 75k a year
wrangler wrote: » I'd agree with that, I took over at 23 and it was some bumpy ride for the first ten years.
Bass Reeves wrote: » What amazes me us the amount of people that consider that an eighty acres farm of what seems to be fairly good land is unable to turn a profit to justify a buyout as part of the solution. One of the big problems with farming over the years was the assumption that stay at home Johnny got the farm. It was an easy decision for a young with limited ambition or was unwilling/ did not like to study/ or just plain lazy. On some cases it has left a cohort in charge of farms who do not look at it as a business. If an inheritor wants a farm if it is the only family asset they should put s buyout plan in operation. Farming is profitable but it is a business and you have to adapt for it to be profitable
roosky wrote: » So just to reply to some questions that were asked in the last few posts. The farm is in the family as far back as can be known, the father inherited the whole farm as he was an only child and didn’t buy any more land other than what he inherited. The question of in laws....the parents were clever in that they asked the three kids to keep it to themselves and not involve their partners so whether that has happened or not I don’t know. Someone asked about the boys just leaving her farm, if the farm was left to her I don’t think there would have been much issue but the parents have already said it’s being split 3 ways and they can decide what they way they want to do that so I can’t see the boys walking away from that offer empty handed. Someone else asked about how has my perspective changed since all the replies (each of which I very much appreciate regardless of whether I agree with them or not). My view is that if one of the sons was in her shoes and was farming and wanting to farm in the future there would be no question of the farm being split, yes the other two would need some inheritance but I don’t think if it was one of the sons that he would be faced with buying 2/3 of the farm at market value. I also notice different view points of the value of the land all going to one child but she isn’t going to be selling it so to me the value is the relative profitability of the farm which is small so really the market value is irrelevant much like if you inherited your grand mother’s jewelry that was worth 20k if your going to keep it in the family and not sell it then it wouldn’t be expected that it would be valued at its market value when the inheritance was being split between the children. I think overall the parents should have said we are going to split the farm three was but on the clause that if one person wants to stay farming and you want to sell your share you have to offer it to another sibling at 25% or market value or something like that .
Biscuitus wrote: » It's coming and there's next to nothing we can really do. So much land in the west will become abandoned but prime land across Ireland will be swallowed up into mega size farms with feed lots. On the bright side farmers will get proper wages, security and benefits that comes with employment but you won't own a farm.
joeguevara wrote: » Simply giving a huge asset to a young person with no ownership experience is fraught with risk..
skooterblue2 wrote: » Farming isnt a job its a vocation. There is a love for the land that the boys dont have. She wants to go home to raise a family (its a female thing, I dont get it). If the parent hold onto the farm too long the kids lose the hunger based on them never getting it. This farm will be gone in the next generation but it will be gone sooner if it is split. 26 acre farms wouldnt support a few cows doing weight watchers. 26 acres isnt a farm but a liability.
joeguevara wrote: » Any person at that age can change their mind about direction at the drop of a hat. It is rare for someone to only have one career without trying out a load of things. Whose to say that If she was left the whole thing she wouldn’t wake up in 5 years say, fcuck it I’m off to Australia and sell up. Splitting it or holding it in a trust is a way of mitigating that risk. But none of this matters, at the end of the day it’s the parents decision. Set out the stall and agree with what they decide.
Waffletraktor wrote: » Whats a big Uk farm these days, cause the landlords are gone broke and it's the contractors in doing the work these days.
skooterblue2 wrote: » I dont think so, looking at the united states who are socially more advanced along the industrial agricultural plan (I did not say better). Its all big farmers and minimum wage agricultural workers. The UK is the same with the big landlords and taking in minimum wage far eastern Europeans, that come as seasonal workers. I always maintain you are stronger working for yourself and investing than working for someone else. Under these plans the Irish family farm is doom before the next generation.
I says wrote: » I said read not reared there is a difference.
skooterblue2 wrote: » Yeah that is how my parents were raised on the farm. in the 1940's to 1960's. I have never seen a man showing eggs at an agricultural show and never met a woman trained as a agricultural mechanic. You pump kids full of all these ideas but in reality when you start to defy gender roles you get unhappy people. Seen them the whole time in university, 10% of enterents into first year engineering are women, even when they have the choice, they still choose other things. Then by the start of second year its down to about 1 in 80. Same with nursing, men dont take it up and when they do they are quite happy to get out of it and diversity after 10 years. It happens naturally with children. My niece is all about her hens but the nephew is all about tractors. Dont mess with momma nature.
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