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Explore our blog featuring articles about farming and irrigation tips and tricks!
By: Myron Friesen
PROBLEM
In our current plan, we give our farming child an option to buy out their three siblings for 80% of fair market value on a contract. Our 800 acres were worth about $8,000 an acre when we did that, and now they are $15,000 per acre. The terms of the contract gave them the option to buy at our death on a 15-year note at the lowest allowable interest rate. Is this still a good way to keep our farmland together?
SOLUTION
Before I answer your question, K.B., let’s see if math can help. The $8,000 per acre land at 80% equals $6,400. Your farm heir would inherit one-fourth and buy out three-fourths so the contract would essentially be for $4,800 an acre.
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