John T, JDSeller and others. Family farming together ?

My brother and I have farmed together since we were both old enough to operate machinery. I have been married for 5 years to a wife that loves the farm and helps out frequently. My brother announced yesterday he was getting engaged. His future wife does not associate with myself or my wife for some unknown reason. We have purchased alot of machinery together along with my wife having a share of the debt as well. I just don't trust this wife to be of his with all we have worked for. We need to set up an LLC or company of some kind to protect myself and my wife in the event of a problem between my brother and his wife to be. Problem is I have no idea how to go about this or where to start. I was just looking to see what others have done in with their farms in this kind of situation.

Be careful how you move forward. The time to set that up woulda been before you were married.

Now, it is going to look like you are trying to cut out the other gal, but keep your wife involved.

Certainly understandable, but its going to be very very hard on your brother to navigate this now. He will be put in a very bad position...... Don't make him choose between you or her, ever. That is a disaster for the farming operation.....

When working this out, stop and look at it from his point of view, what he has to deal with.

Paul

Nat, First talk to your brother. Second, schedule meeting with good local attorney. Third, take your brother along with all records of debt, description of what you farm, and what equipment you both own, and a list of concerns to meeting with attorney. Fourth, ask attorney about a pre-nuptial agreement for your brother and his wife to be. If your brother won't go along and make everything legal, then dissolve the current "partnership" and farm on your own, which will be much better than dealing with the new wife. Tom

On the other hand,I've got a good friend who farmed with his Dad and brother in perfect harmony for years. They got along for quite a few years after the Dad died in fact. When their kids started coming of age,that's about the time the crap hit the fan. There were a lot of lawyers and a lot of hard feelings before that whole thing was split,and even then it wasn't really to anybody's full satisfaction.

Granted the right time was before there was even one wife involved,but it's going to get a lot uglier if something isn't done before there are even more people involved. In my never to be humble opinion,it's best to approach this as needing to do something before anymore people are involved,not before THAT person is involved. Keep personalities out of it.

Let me go Dr. Phil on you. You probably DO KNOW why she doesnt associate with you and your wife. Im going to go out on a limb and figure it might be wife/future wife problem. Nothing to do with you at all. GUESSING.. Could be the way you live or the way she lives.. etc etc.. Like I said Dr Phil NOT ME..lol my guess would be wife/girlfriend problem..nothing to do with you/girlfriend.. GOOD LUCK

IMHO, sounds like "wife to be" is a "Gold digger"!

Otherwise, why wouldn't she want to try to be part of the family?

You are in a delicate situation here. You have already made the commitment to the brother and he may not be so understanding about your concerns. You have to broach on this some how and maybe a neutral party can help get the discussion going. On the other end of what you mentioned it is too early to say your brother's fiancee is coming in with an itch to make trouble. When it comes to human emotions there is no safe answer here. The hard cold reality for you is that if things turn sour there is the great likely-hood you could lose financially.
As far as your question on the LLC that is one of the reasons I say there is no magical solution to your problems. Lawyers have gotten quite adept at working around them to meet their objectives. I hate to say it but now is the time to think about splitting the assets between family members based on contributions. You and your brother can continue to consult with each other as far as equipment acquisitions and one can purchase certain pieces while the other handles the balance. If you can get to this point with your brother on this plus the ground then you will have a framework going forward on new land purchases which could be split evenly with separate deeds for each brother.

I have two friends that have "partnership" farms and know of others that must be. It appears that it comes in usually when the second generation gets married, and everyone decides that there really needs to be an agreement in order to head off problems. The ones that I know of appear to work well, and it appears that it just recognizes the need to treat it like a business with multiple owners.

Good afternoon Nathaniel, I know this sounds like a broken record, but you asked for advice so I will put on my attorneys hat for this one. I've performed some Partnership (The only ship that wont float lol) and LLC work for business clients AND NO TWO SITUATIONS WERE EVER THE SAME. What was perfect for Billy Bob may be the exact opposite of what was best for Bubba, so ask yourself, do you want to do what Billy Bob did or what Bubba did or someone here did,,,,OR WOULD YOU PREFER A BUSINESS PLAN SUITED TO YOUR SITUATION ONLY??

Ive also seen familys split up and feud something awful and all HILL break loose when things go wrong so ESPECIALLY with a family situation, so that's THE MOST IMPORTANT TIME WHEN YOU NEED A BUSINESS PLAN AND ORGANIZATION (when family is involved lol)

Depending on the assets and real estate and family members involved, Id be thinking NOT a Partnership and more likely a Corporation versus an LLC with well devised by laws and structure and voting rights and meetings and plans if things go bad and buy out arrangements and each persons rights and duties etc etc. This is NOT for the timid or Billy Bob or Bubba to work through or give advise or do what Jimmy Joe or someone here did, THIS REQUIRES A TRAINED COMPETENT PROFESSIONAL who knows the law inside and out and takes the time to figure all your wants and needs etc. and ONLY THEN then suggest a plan.......NOT based on a sentence on a forum board............

Sure, that will cost some bucks versus doing what the neighbor or your brother in law or someone here did, BUT CONSIDER THE INVESTMENT AND THE RISK INVOLVED (moreso with family) and consultation with a local trained attorney MAY BE THE CHEAPEST INVESTSMENT YOU MAKE.

FINALLY MY BEST FREE ADVICE IS DO NOTTTTTTTTTTT do what I advise as I have no idea of your situation nor researched your states laws,,,,,,,,DO NOT do what Billy Bob or Bubba or anyone here suggests, what may be perfect for them could be the OPPOSITE of what's best for you.

Id look for a local attorney who practices in the areas of business law and corporations and LLC's and is also familiar with tax issues. Its not hard, just find one and set up an initial consultation (often free or inexpensive) and then you can talk and listen and decide to hire him or her or go elsewhere OR YOU CAN DO WHAT SOMEONE HERE SUGGESTS. You can also go to the Library and get LLC or Corp forms and do it yourself or go to like Legal Zoom etc and again do it yourself.

Its your money your risk and your choice and I think you know what's best, there, thats the best advice I can offer as an attorney .......... HIRE AN ATTORNEY LOL

DISCLAIMER: This is an opinion, it may be right it may be wrong, just like ALL other opinions here, be they lay or professional, take it or leave it.

Best wishes, God Bless and Happy New Year to ya. Good luck with the farm

John T BSEE, JD, Country Lawyer

I can't tell you what the right answer is but I can say I've witnessed your possible situation first hand. As much as it may hurt do something NOW. It'll be much worse later if you don't...

Casey in SD

Agree with you completely, do it now don't wait.

My only point was to not kick up dust with the brother, oh man we gotta get some papers signed before your rotten wife to be gets her hooks in us.... That won't end well.

But yes, before kids appear from each side and things get more involved, get something set up, working on it today is a good idea, I agree with you for sure.

Here is the farm, here are shares of the farm whomever is invested in it..... If you add outside assets to it they get bought in, if you add labor that gets bought in but labor tends to be cash, not worth very much of shares so be careful on valuing that.... IMHO

Paul

It would be a good time to slowly start separating assets. This sounds like the start of a bad time for you. Hopefully you can do it without offending your brother but will be best for you in the long run.

If its machinery and not real estate you own together then that should take care of itself eventually if you don't buy more together.I'd just have a frank talk with him and explain your doubts about the situation,his reaction will tell you a lot about where its all going.Maybe he'll get a prenup agreement and do himself and you a favor.Dealing with him now will be easier than dealing with her later for sure.

Talk to your brother alone first. Tactfully point out the obvious fact that his future wife does not associate with you and your wife. He probably knows but it needs to be said aloud tactfully. Ask him if this seems normal or if it could be a problem : because future decisions have to made by all parties together. And everyone has to get along to make decisions together. Talk to him tactfully in a way where he can see the same conclusion you see :it's a problem! Mark

All good advice but it don't take a Philly Lawyer to tell him if the two wives don't get along the partnership is history.

Thanks for the advice guys, Let me assure you that I'm not sure what her problem is. She has never spoken more that one or two words to us since they have been together.

Hopefully the two of you (brothers) can talk frankly with each other to start. As Mark pointed out it would good to start by observing to your brother that the wife-to-be seems to be distant. It's kind of hard for us here to put our finger on it as we do not know the other people at all personally. Don't jump to conclusions too soon. It's a tough spot to be in no matter how you look at it. Good luck and hopefully things work to a happy solution even if it is one you did not expect.

Well you asked for it. LAMO

If the future SIL will not talk to you now she sure will later when "she" wants "her" share of the goods. I hate to say this but you need to separate the partnership YESTERDAY!!!!! One way to do this is to put an agreed value on all the joint owned equipment. Then trade assets to get a split that you all three agree with.

The two of you can still farm together but with clear separation of ownership on crops and equipment. AN example would be that you own the planter and he owns the field cultivator. He pays you for planting and you pay him for tillage work.

You could incorporate but if you do it would need to be more than an LLC. It would need to be a more formal corporation. Then this opens up a lot of tax questions.

The first thing I would do is talk PRIVATELY with him about his new engagement. HE is riding a HIGH of emotions right now. HE is all happy about this engagement. HE will be hard pressed to understand your concerns but you need to do it now not later.

Truthfully I do not hold much hope for your farming together for long if one spouse does not get along with the other partners. Your brother's new intended will have more sway than you do very shortly. She will control all his love life and half his money. You will control what??? ZERO!!!!

My closest brother and I worked together for over 40 years on different farming things. We bought equipment together and jointly rented ground together. HE remarried 5 years ago. His new wife was jealous of our relationship. Over a two year period she drove a wedge between he and I. She finally convinced him I was taking "advantage of him" for asking for his share of a repair bill on a join owned combine. She would even check his cell phone records to see if he talked to me and then raise cane with him if he had talked to me. So he quit talking to me. We have not spoken to each other privately for 4 years. We talk at family functions but that is it. She has to be right there even then. I once asked her if she went to the bathroom with him too. I was luck enought that we where basically on equal terms as far as valve on some items. So he took the combine and I took the planter an baler. We no longer had any joint debts.

So I have been in good and bad partnerships. The newer ones we have the percentage of ownership in writing for every single piece of equipment. No land jointly owned. I did buy a farm with the oldest son 7 years ago. We split it at the road. We farm it as a unit but the land has two separate plots and owners on record.

Faced somewhat the same problem with my Dad's farm after he died. Due to distance and other considerations my brother and I sold the buildings and a few acres. Then we divided the remaining so that 1/2 was in each of our names separately. We rent to an old time neighbor, no equipment involved, and it's worked well for 15 years, and I don't have to worry about my wife's involvement with brothers family if something happens to me. My advice, be absolutely honest and fair. Better to lose a little bit now, keep peace in the family, maybe be able to maintain your operation together in another form.

Inventory the equipment, detail the cost of each piece, try to reach a fair value. Then try to determine your respective equity ownership. You could trade or possible purchase certain items you need or consider that you high a higher equity interest in. Put any agreement regarding ownership in specific equipment in WRITING. Do this BEFORE any addition to the family. Eventually you could do a corporation or an LLC.
But there will most likely be tax consideration to look into. Try to resolve this matter BEFORE another family member is involved. I also second what John T has disserted.

Short answer... there's no way you can really protect anything from her unless she signs a pre-nup giving up any and all claims to everything... and probably not even that is iron clad.
Best answer... you take yours NOW and he takes his now... and you go your separate ways. Even if you still work together... and she takes off with half what he owns, that can still leave you with a big hole in your operation.
No easy answer here unless she's willing to sign on the dotted line...

Rod

reading all these posts reflects a lot my experience . my brother and I had a chance to buy the neighbor dairy farm when I was a senior in hi school ,, but oursoon to be wives would not get along ,,. we married them anyway ,even though 15 yrs later they were both gone,, and the dairyfarm now has shi!houses all over it with modern bs yuppiphux with dumaz kidz living all over it .no easy answer ,, but a common denominater . durn selfish , jealous can women mess up a good thing every time...... men ,, you gotta keep those gals subservient ,, LOL

You may want to phrase this by making it all about you.
Maybe say something like YOUR wife is acting funny and suspect could leave and you want to get stuff in writing to head off any problems if she does.
Then to make it ok with your wife say you fear HIS FUTURE wife could be a problem and you want to get this all in writing to keep it all straight.

That way eveyone is on board to save thierself but this will end up saving you all !

(quoted from post at 15:28:24 12/27/13) You may want to phrase this by making it all about you.
Maybe say something like YOUR wife is acting funny and suspect could leave and you want to get stuff in writing to head off any problems if she does.
Then to make it ok with your wife say you fear HIS FUTURE wife could be a problem and you want to get this all in writing to keep it all straight.

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Don't have much opinion or knowledge about what you should do from a legal standpoint, but I think Mike M reflects what I was thinking as I read through this thread. I was thinking, what would you and your brother do if YOUR wife decided she'd had enough? Tell brother that his engagement got you thinking about this whole situation and you feel you guys need to sit down and work something out before someone else is involved (his wife) and things get even more complicated. He might feel that you are trying to cut the fiance out but assure him that she'll end up with half of his half anyway (unless there is an iron-clad pre-nup, if there is such).

A friend's father was in partnership with his brother their whole lives with undivided interest in the farm and machinery. Each had their own home place, but it was part of the whole farm. The brother died long ago so her father was in partnership with the wife. He quit farming and they rented the place out to the local BTO. Her father died, making my friend and her two brothers partners with her uncle's wife (they also have two children). Since 'friend and brothers' were up in their 60s they wanted to sell off the place but had to get agreement from the aunt. She was basically run by her son who was a lawyer and shady former state level politician here in Ohio. Since cousin Shady didn't want his mother to sell, friend and brothers tried all kind of ways to divide the property in half so the values would be equal, but Shady would have none of it. No sale no auction, no nothing. I suspect, him being the greedy bast*rd that he is, if a deal didn't favor him and his side of the family he wasn't going for it. So, last I talked to her they still had not been able to do anything except collect the rent money from the BTO and from a tenant in her father's house. To further complicate, if they don't settle it her brothers have children as does Shady and his sister. At least my friend can leave her share to the nieces and nephews since she has no kids.

Upshot is, get a division in place before it gets ugly with the family.

He had better make sure the wife is OK with the good cop/ bad cop act first. The rumor mill can make this plan blow up in a person's face. Especially if her relatives are no fan of Nathaniel's to start with.

I have seen brothers and Dads farm together for years with 0 problems and have also farmed with my Dad until He was killed.I have seen fathers and brothers that were close end up not speaking due to family problems that were wife related.Life is too short and best to work things out now.Blood is thicker than water.I farm with my son but will not add SIL as it is smooth now and want it to stay that way.