Cal Brandley, a former solicitor with Alberta Agriculture, counselled hundreds of farm families on legal matters. One of the issues he pushed hardest was the need for a will.
“Here’s a typical scenario,” he told me one time.
“A son has been working with his father on the home farm or ranch for a number of years with the understanding that he will inherit the ranch when the old man dies, but they have nothing on paper.
“Eventually the son marries and at some point his wife asks him what they have if the dad dies. The son tells her he will get the farm, but she points out they have nothing on paper, so legally they have nothing.
Read Also
Crop insurance’s ability to help producers has its limitations
Farmers enrolled in crop insurance can do just as well financially when they have a horrible crop or no crop at all, compared to when they have a below average crop
“The boy talks to the dad, who says, ‘what’s the matter, don’t you trust me?’ The boy assures the dad he trusts him, so the dad says, ‘oh, you think I’m going to die’. The boy says ‘Oh no Dad, you’ll never die,’ and goes home and climbs the walls. He’s trapped. He can’t get his dad to put their agreement in writing, sohe can’t provide his family with any real security.”
People get funny ideas about wills. Some think that planning what to do about their estate will somehow cause them to die. Others don’t know how to divide their assets, so put off making a will. Cal said such people would tell him, “they’ll figure out how to divide it after I’m gone.” He said nothing could be further from the truth.
Many families have been torn apart by disagreements over who should get what. Not only that, those families don’t always have much say in what happens with the estate. The government decides for them.
When a person dies intestate, or without a will, the government in most, if not all, provinces and states appoints a trustee who oversees the allocation of assets. It is expensive, and often unsatisfying for family members. Cal used to say, “you wouldn’t invite your neighbours to divide up your estate after you are gone, so why would you let the government do it?”
Without a will and no estate plan there is a good chance the family will have to sell the ranch to pay the estate and capital gains taxes that suddenly become due. That would be enough to make you turn over in your grave, wouldn’t it?
It is never smart to die without a will, even if all you have is a modest house in town and a few furnishings. But a rancher dying without an estate plan and a will is outright dumb. Too much is at stake.
If you died tomorrow, or later this afternoon, or as soon as you finish reading this sentence, who would take over the operation of your ranch? Does your wife have all the information she needs to deal with the legal and tax obligations she will have to face?
It can be hard enough under normal circumstances, but when she is grief-stricken, it is nothing short of cruel to leave her with an accounting nightmare and no knowledge of the ranch’s business dealings.
Are one or more of your children involved in the ranch? Do you have written, legally binding agreements? If not, stop reading and do it right now. Yes, it is that important.
If you don’t feel comfortable talking with your family about who should get what when you die, hire a facilitator. If you don’t know where to find one, look in the yellow pages under meeting facilitators or family counsellors, or look on the internet using those same search terms. A meeting facilitator can be invaluable in helping everyone feel heard and in coming to an amicable agreement about how the estate should be handled. And don’t make planning your will a big secret. The best way to know what your family wants to see happen with the ranch after you are gone is to ask them.
Some people worry about how to divide their assets. They don’t want to give the whole ranch to one child, but they also don’t want to bankrupt that child by making them take a big loan to pay off the siblings’ share of the ranch.
Cal used to counsel farm and ranch couples to treat their kids equitably, rather than equally. If they had three children and had paid for university educations for two of them and maybe helped them buy houses in town, he said it was equitable in many instances for the child that stayed behind to help run the ranch to receive it in the will.
Hard as it may be emotionally to part with the ranch, if none of your kids want it, you will be doing them a favour by selling it to someone who does, well before you are likely to die of old age. As Brandley used to say, it is easier to divide cash among several children than to divide a ranch.
Want to stay on the ranch after you retire? The simplest is to sell everything but the home quarter, with an agreement that it will go to the buyer when you die. Or sell it all and have a life estate in it.
Other options will be explored in a future column.
When Elizabeth and I were married, we had five children between us (my three and her two). We talked at some length about what should happen with our stuff should we die, and then we got a lawyer to help us write a will. Don’t write a will on your own. It is too easy to make simple mistakes that nullify it.
And continue to update it as needed. We believe this is important, and Cal Brandley would agree. I remember him telling me about a couple who wrote a will when their oldest daughter was a baby. They left everything to her at that time. They later had a son, who worked with his father for 20 years on the understanding he would own the farm when the dad died. They had no written agreement. When the parents died, the daughter got the farm because they had never updated their will. Don’t you be like that.
Edmonton-based Noel McNaughton is a professional speaker, facilitator, coach and writer who specializes in guiding men and women through the uncertainty of life transitions. He can be reached toll-free at 877-736-1552. Website: www.midlife-men.com.
