A Plan for When the Farm Outlives You
[imgbelt img=tammy-shafer-porch320.jpg]Passing on the family farm is legally complicated. One Missouri widow
and several estate-planning pros offer hard-earned experience and
[imgcontainer left] [img:estatetammydog320.jpg] [source]James Fashing/Today’s FarmerTammy Shafer was widowed a year ago. Since last summer, she’s learned a lot about the special problems of estates and estate planning where family farms are involved.
There’s an old saying about farmers: you’re land rich and cash poor. You hold most of your assets in land and equipment. And that situation creates complex problems when it comes to passing on the farm to family.
Tammy Shafer will never forget June 27, 2009, the day that her husband, Roger, died in a pickup accident. The couple had no estate plan or will. Tammy agreed to share her story so that others might learn how to prepare for a similar situation.
“Before, I had limited involvement in the farm,” said Tammy, who lives near Green City, Missouri. “I worked at a job in town, raised the kids, helped out where I could and cosigned bank notes, but Roger was the decision-maker. He didn’t want to worry me with the financial part of it.”
Today, Tammy continues to work as a medical technologist in Kirksville, 30 miles away. She manages the farm finances in her spare time. Tammy and her family continue to grow row crops, hay, crossbred beef cattle and contract-raise weaner pigs.
“Our goal was always to farm with the kids some day,” Tammy said. “Fortunately, they are all working together, and they want to help.”
All three children stepped up after the accident. Son Logan, 25, suspended his own construction business and returned home. Trevor, 20, dropped out of college to help. Daughter Gentrie, 23, stayed home through the fall semester before moving to Texas A&M University, where she’s working toward a masters degree in animal science and beef reproduction physiology.
All three want to farm on their own. Tammy hopes that they can carry on as the fourth generation on the Shafer family farm. If so, they’ll need to expand; the current operation can’t support everyone.
The school of hard knocks
Raised on a farm, Tammy knows cattle, but it’s been a challenge to learn to budget and make a profit. “Roger was a very hard worker,” she said. “He always made it work.” Now Tammy’s the money manager. Gentrie helped Tammy set up spreadsheets to track earnings, expenses and other financial accounts.
Roger had worked with his brother, Brent, to row crop, mostly corn and soybeans. “Brent’s been instrumental,” Tammy said. “Without him, I’d be lost.” Today, she’s out of the row crop business; Logan and Trevor continue to raise crops with Brent. Roger’s parents, Leon and Kathryn, are retired but help out when they can.
“I wish I had known more about the financial aspect,” Tammy said. “I understand Roger’s thinking: the finances were his job, and he did his job well. But it’s important for women to know things like who owns the equipment and who we rent land from.”
The Shafers do rent most of the land they farm. In Missouri, farmers rent 46 percent of all acres farmed; nationally, farmers rent 55 percent of the land they cultivate. As with many farmer-landlord relationships, the Shafers depended on verbal agreements. Since women generally live longer than men, widows own a lot of farmland.
Tammy recently asked a landlord, a widow, to sign an agreement that spelled out the lease price. The neighbor balked at the idea of a written contract, but Tammy reassured her, “It’s not for us; it’s for our kids.”
Editor’s note: This article originally appeared in the online edition of Today’s Farmer. Thanks to Nancy Jorgensen and the editors for permission to repost it here.