"Handing Down The Family Farm"

Arnold Brody, like his father before him, has farmed his entire life.  And he hopes his son, Russ, will be able to continue to do the same.  At age 79, Arnold says he's starting to slow down and he's giving more thought to what will happen to his Midwest farm when he's gone.  These days he can only do tractor work a few days a week and he's leaving more of the operating details for the family's 250 acres of farm ground to his son. 

Walking through a newly planted cornfield, Brody talked recently about his family's values and farming experience.  He stopped for a moment to check on how his grandsons, Carter, 15, and Andy, 14, and some of their friends were doing with detassling.  The boys, who live on the farm with their parents, explain this stimulates growth and improves eventual yields.  Brody said he believes working on the farm from an early age is "wonderful for character development".  And Carter, Andy and their friends - although they're muddy and hot from the hard work - say they enjoy the extra cash they earn from their work.

Like many others, the Brodys have followed the time-honored tradition of handing down the family farm from father to son.  In an analysis of data from the 2002 census of agriculture, researchers found that less than 10% of the nation's 2.1 million farms showed evidence of having a plan for handing down the farm to the next generation.  Arnold Brody says that he can't afford to be set in his ways and has recently started the planning process with his family's Basic Financial Solutions representative.  Arnold and Russell, along with their spouses, have met several times with their representative because everyone believes handing down the farm is an active responsibility that requires everyone's involvement and ongoing attention.

"With my dad, his estate plan was that everything would be divided equally between me and my sister when he died," Arnold Brody explained.  "That wasn't the best thing to do for the farm, but that was my father's decision.  I had to borrow to hang on to the farm and I'll finally pay off the loans this year.

"I think it's only right that Russell, who lives here and works on the farm, should be able to acquire the family business when the time comes.  Like my father, I have two children - a son and a daughter.  I can't just cut off my daughter, Anne, from the estate.  She lives in Michigan and is president of a community bank.  She did that on her own and I'm proud of her, but at the same time she's not working on the farm, helping build the business here."

Russell Brody, 51, says that even though his father is an advocate of estate planning and wants to see the family's farming business continue, it can be a difficult subject to discuss.  "Let's face it," he said, "sitting down and talking with my dad about these things isn't easy.  It's about control and not wanting to let go.  It's a lot of work, complicated and, at times, emotionally draining.  And then there are my boys.  But our Basic Financial Solutions representative helps us to remember our priorities and structures time to start the conversation."

"As a farmer, I enjoy my life," Russell said.  "But I don't want to find that just as I'm about ready to retire, I inherit the family farming business and face a mountain of debt in order to hang on to what my father, my grandfather and I have built.  It should be mine.  My grandfather passed on the farm the old, traditional way and my dad paid the price," said Russell.  "Things don't have to be like that."

Sitting at his kitchen table, Arnold Brody pulled out a local newspaper and pointed to a real estate ad for a nearby farm.  The asking price was $3.5 million.  He worries that the appraised value of his own farm would mean a death tax bill so high and out of proportion to the income the farm generates that his son won't be able to continue. 

"Fortunately, my father was very conservative and we had some liquid assets that helped us hang on to the homestead," Brody said.  "But today's current farm economy means my assets are all in land and equipment.  Without liquid assets my son will have to borrow or sell."

"While there are days when estate planning probably seems like a puzzle, the Brodys' have established the succession plan as a priority and together we've taken significant steps to mitigate the tax issues related to the transfer of assets," said the Brody's Basic Financial Solutions representative.  "Arnold and Russell know that if they don't take these steps, they'll be facing a potential disaster.  That's why people need to start the planning process early.  It's not a last-minute thing.  And you don't do estate planning all at once and get it over with." 

Arnold said he wants his children and grandchildren to be happy, successful and living on the farm for many years to come.  That's what is important about life to him and he's willing to do what he can today to help make sure it happens tomorrow.

To speak with your local Basic Financial Solutions representative about "handing down the family farm", click here.

Go back to home page.