The legacy of the farm poured out on the whiteboard

The questions and possibilities are worth exploring when determining what outcome your will has on heirs.

Below a hill in the foreground, harvested fields feature strips of bare soil between strips of stubble with some green weeds showing through.
Consider the outcomes expected for the farming and non-farming heirs as a result of your will, Myron Friesen says.
Melody Harp / Grand Vale Creative LLC

I’m at the whiteboard and I start writing down the information. I write down that there are 1,800 acres and according to the client, those acres are worth $14,000 per acre. Then they tell me that they have two sons and one of them is farming, so I write that down. I ask them what their will says, and they say that if the non-farming heir sells, that the farming heir can buy for 70% of fair market value.

So, if I pause right there, what are you thinking? Are you pretty sure that this farming heir is going to make it without any doubt? Are you wondering, 70% of what price? Are you wondering if the non-farming heir will want to sell? Are you wondering what happens if the farming heir dies first? Are you wondering if the farming heir’s children have that same chance or if it just is an option for one child/one generation? Are you wondering how long the parents will live?

More Friesen financial advice

I can’t help myself, so I start doing the math. I know that $14,000 times 70% is $9,800 per acre. I also know that the loan payment on $9,800 ground based on 7.5% interest for 30 years will be about $823 per acre. Since the farming heir needs to be ready to buy out the other half, I write 900 acres times $14,000 times 70% leading to a potential new loan of $8,820,000.

Then I write down that the parents are 75 years old, and the farming heir is now 48 years old. I add 15 years to 75 to get to age 90, which of course is just a guess, but it is also a possibility. So, I add 15 on to the 48 to get to 63. Now I go back to the $8.82 million and put a question mark because I don’t know what the price will be in 15 years. My guess based long term history is that there is a very good chance that numbers will be bigger in 15 years then they are right now.

Then I try to look at the overall picture and see that the loan payment will probably be at least $823 per acre and even if I divide that by all 1,800 acres the payment will be at least $411 an acre plus property tax. So likely a payment of well over $450 an acre. So that means the farming heir may be starting to buy when they are age 63 and if things go as planned at age 93, they will have it all paid for a second time without changing the family name.


Of course, I am reminded that the non-farming heir may not want to sell. That might not be their option but let’s say it is. How would they decide? Back to the whiteboard.

Based on the parent’s formula, the farming heir could be renting the ground for $250 net after property tax. So, the non-farming heir would have around $225,000 of annual income but they are always going to be handcuffed to the land and so will their children. They compare that to a 5% return on an investment, so if they had $8.82 million of cash from a land sale and invested it at 5%, they would have $441,000 of annual income. If they thought, they could get a 7% return they would have $617,400 of annual income with no strings attached. Are you thinking what I am thinking? Good chance they would sell?!

So, look at the whiteboard for a while. Do you have any concerns? Fifty years of one generation accumulating land and raising a family are on the board. Would you change anything? What will the whiteboard look like for the next generation?

Myron Friesen is the co-owner of Farm Financial Strategies Inc. in Osage, Iowa. He can be contacted at 866-524-3636 or

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