Deciding who to give the farm to leads to a lot of anguish for parents.
Parents can be left torn between many opposing yet equally legitimate factors.
Concerns can include trying to be fair to all children, wanting to maintain the viability of the farm, being fearful of the relationships or lack thereof of their children, worried for their own security, worried that children may end up falling out with each other, and in some instances, wanting to provide for children with disabilities.
The anguish can be even more difficult where each parent has differing opinions on the right approach.
Dividing the farm equally by putting the farm into the joint names of your children is a simple option, but one that can store up problems for later in life.
The probability of a dispute arising subsequently is magnified.
Issues that can cause disputes include cases where one sibling wants to cash in their share of the land and others cannot afford to buy out, or valuations cannot be agreed upon.
Similarly, disputes can arise where one sibling wishes to farm the land, whereas others wish to let it to a third party in order to avail of leased land exempt income.
Later in life, children may wish to give sites to their own children giving complicated tax implications where more typical tax reliefs available on the transfer of sites to children do not operate in the case where the land being transfer is jointly owned by siblings.
It is often the case that planning permission is granted on the condition that the land is sterilised for a period of time, meaning children of other siblings are precluded from getting sites of their own.
In the longer term, passing land down in such a manner if replicated from one generation to the next would result in land owned jointly by first cousins, second cousins and so on.
Without wishing to cause offence, putting land into joint names of children, or indeed failing to make a valid will, is taking the easy way out, and by doing so you are deferring and compounding the difficult choices for the next generation.
A step up from joint ownership involves thrashing out a property co-ownership agreement. Putting such an agreement in place in advance of putting property into joint names has the primary function of structuring how the property is to be dealt with and eventually disposed of.
Co-ownership agreements are not a cure-all.
Take for instance property owned under joint tenancy, the death of one owner causes his or her share
to vest with the remaining co-owners.
This might leave the surviving spouse or children of that deceased co-owner destitute with no inheritance.
In the case of joint ownership as tenants in common, the death of one co-owner means their share can be bequeathed to their spouse or another party who is not bound by the co-ownership agreement.
A step up from co-ownership is the division of the farm into separate parcels with children owning their own specific parcel. Issues that commonly arise here may include the fact that the land cannot be divided conducive to give equal shares or that sufficient access and road frontage might not be in place to provide for independent plots.
Division of a farm holding can mean that no successor is left with a viable farm. Worse still it can mean that a successor may struggle in a half-life trying to rebuild their share back into a viable holding once more, in such instances, the question is, is their inheritance a blessing or a curse?
There is an almost innate code amongst Irish farmers to improve and pass on what they have received. For many farmers, the choice to sell land and divide the proceeds amongst their children is not up for consideration. Yet the struggle of those gone before us was undertaken so that future generations could have it easier.
Does dividing the farm amongst many actually confer benefit to them?
Decisions, such as transferring the farm to one successor who will carry on the baton or selling up and dividing the proceeds amongst children can be difficult. Sometimes the hardest thing and the right thing are the same thing. Seeking professional help and advice can help navigate such difficult decisions.
