By Elizabeth Williams
DTN Special Correspondent
INDIANOLA, Iowa (DTN) -- It's a simple question: What do we own?
That's what Rebecca Crownover, who inherited farm assets she and her husband acquired through six years of marriage for their family's diversified farm in Sunray, Texas, wished she would have known. Her 31-year-old husband Adam died in a Fourth of July ATV accident in 2009. The accident left her the single mother of a toddler and business partners with in-laws as they struggled with the loss of a son and brother who played a key role in management.
Whether you are in your 30s or in your 80s, "you're not doing your spouse any favors by avoiding talking about your assets and how you manage them, and writing things down," said Ed Cox, staff attorney with the Drake Agricultural Law Center in Des Moines.
"It's a nightmare, dealing with all the business stuff, in addition to all your personal grief," said Crownover. "Farmers buy a lot of assets. On a yearly basis, you should have a personal inventory of everything you own. Put it in a safe along with your will and estate plan. And anytime you purchase an asset in the year, put the price, debt and who owns it, if it's a shared purchase, in the safe, too.
"I was even involved in the farm," Crownover added, "But there were so many things I didn't know."
Of course, your accountant and attorney can help you sort through the barrage of papers you'll have to deal with, from a business and legal standpoint. However, if you don't have a trusted accountant or attorney who you think will take the time to help you, look for a new adviser.
"Our accountant flew down to our farm and sat at my dining room table for days going through folders and papers. He was a lifesaver and so was the Family Farms Group that we had just joined at the time that provided helpful guidance," said Crownover.
In other areas, a conversation with your spouse can provide clear direction and reduce your stress in a difficult time. Knowing the ins and outs of your financial situation is important, but there are other areas which you may not have discussed during your estate planning, that are critical for the continued management of your farm.
DOCUMENT LEASE ARRANGEMENTS
Many farm operators assume their spouses will simply lease owned land after their deaths. But who are all your tenants? Which acres exactly do they farm? Or, if you're still farming, who are all your landowners? What are your lease arrangements -- crop share, cash rent or custom? How long is the lease? Be sure you have written leases. If you have livestock, explain how it is owned, said Cox.
"Put all your leases in a centralized location," advised Crownover. "Make personal notes in the margins."
Walk through the lease process with your spouse, added Cox. "One woman I talked with who had inherited farmland said she had no idea how to rent land," Cox said. "You might also explain who pays for long-term improvements." A landowner may not wish to neglect improvements, but may balk at added costs because she worries she is being taken advantage of, Cox explained.
Hunting rights pose another decision. What if your neighbor says, "Your husband said I could hunt on your property as long as I want" -- is this exactly what your husband said? "Maybe you don't want the liability or maybe the hunting rights have monetary value," noted Cox. It would be nice to have some direction from your spouse in this area.
Another question many widows have is what is a fair rent? Here is where local advisers (accountants, real estate brokers, lenders) are helpful. "One lady I know who inherited land in southern Missouri wanted to buy out her brother's share. They were getting paid $20 per acre in rent and after negotiating with the tenant got it raised to $45 per acre. The tenant wanted a 10-year contract, but they lowered that to a six-year contract. When she asked advisers in the area what were cash rents for that quality of land, they said $125 to $300 per acre," recalled Jean Eells, curriculum developer for Women Caring for the Land, a program sponsored by Women Food and Agriculture Network.
If you are unsure of what you farm, Eells recommended widows get land ownership and tenant information at their USDA service center. "You need to talk with both the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS). I tell widows that there is usually a woman on staff in the local office who can help them sort through the questions she needs to ask. It does take courage for some of these elderly ladies to walk into a government office of mostly men, but they need to have this information before making any financial decisions," said Eells.
CONFIRM CONSERVATION PRACTICES
A long-range conservation plan for the entire farm is usually not written down, but most farmers have thought about it. Highly erodible ground usually has a written conservation plan filed with the NRCS. But other conservation ideas might not be documented.
"Most of the women I talk with want to conserve their land," said Eells. "But they would have liked to have known what their husbands thought of enrolling in the Conservation Reserve Program, woodland improvement, cover crops, rotational grazing, fencing cattle out of a creek, etc. These are decisions she has to make, but she would be more comfortable if she had some direction from her spouse."
"You can't just assume the tenant will take care of the land," Eells added. "Ask your husband, 'What would you never do?'"
Sometimes hiring a professional farm management service can relieve these stresses. Ken Gorden of Decatur, Ill., decided at age 79 to look for a professional farm manager who would manage the farm for his family in the way he wanted it to be managed after he died. For the past 11 years, he has had a good working relationship with the farm manager and he is pleased his legacy will continue after he's gone.
SHARE FAMILY PARTNERSHIP WISHES
"I've always been an entrepreneur at heart and I still have that same passion," said Crownover. "I wondered if my husband's family wanted me to still be part of the farm. It was a relief to know that there was no doubt they wanted me to be part of it. I really consider myself part of their family. But I wasn't sure" right after Adam died.
Not everyone is business savvy, said Crownover. There are a lot of decisions to make. "It's good to have some direction as to how the spouse would want things handled."
In talking with farmers about what they want their heirs to know, Cox reported one farmer said, "I want them to know that they can sell the land," even though the farm had been in the family for generations.
Other farm owners want to keep the land in the family even if no family member farms the ground. Or, maybe the owner always planned to sell it to a long-term tenant. Having that conversation ahead of time provides the heirs a clear direction and could possibly avoid pulling the family apart.
GIVE YOURSELF A DEADLINE
Having the conversation -- what do we own, where are all the lease arrangements, how do we conserve the land, how do you want the farm managed -- is easy to put off, but important to do, said Eells. The questions aren't difficult.
Eells' advice: Give yourself a deadline: "'We will have that conversation before Christmas,' or by your birthday, or whatever deadline works for you. Otherwise, it is too easy to put off. "
More resources are available for farm women online at:
Annie's Project (short for "Annie's National Network Initiative for Educational Success"), a six-week course that teaches risk management, problem solving, record keeping and decision-making skills in 25 states. Google "Annie's Project" for your state program.
Women Food and Agriculture Network: http://wfan.org/…
Drake University's Ag Law Center offers sample leases at http://sustainableaglandtenure.com/…
Also, at Drake University's Ag Law Center http://sustainableaglandtenure.com/…, download "The Landowners Guide to Sustainable Farming" (under the Landowner's Toolbox tab) which includes such topics as "Talking to your Tenant" and "Key Considerations" for your lease.
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