Fair Isn't Equal; 12 Examples

A major sticking point in farm succession planning?

Almost all the wealth is tied up in three things: land, livestock, and iron.

Try splitting that equally between on-farm and off-farm kids, and you might just end up losing the very thing you’re trying to preserve — the farm.

But here’s the tension: families don’t want to shortchange the off-farm kids. And they shouldn’t. Parents want to be fair. But fair doesn’t mean equal. And equal isn’t always fair.

We learned that when we were young.

Growing up, anytime we told Dad something “wasn’t fair,” he’d shoot back:

“You’re right…the Fair’s in Huron.”

(You see, the South Dakota State Fair is in Huron, SD)

That line still echoes. The other day, one of our kids said, “That’s not fair,” and our 2.5-year-old piped up without missing a beat: “The Fair’s in Huron!”

It’s funny, and it’s true.

When it comes to farm succession, “equal” is easy. Fair? That takes thought. It takes creativity. And it takes guts to say out loud what everyone’s dancing around.

Here are 12 real-world examples of families who planned ahead, got creative, and kept their operations (and relationships) intact.

1. Divide the Assets, Not the Farm

One couple had four kids: one stayed on the farm, three moved to town.

Their will left all the land and equipment to the on-farm son. The other three kids got everything else: retirement accounts, brokerage funds, and a life insurance payout.

Dollar for dollar? It wasn’t equal.

But the off-farm kids got clean, liquid assets. No cattle to manage, no fences to fix, no tough decisions to make. Everyone walked away knowing the farm was still in good hands, and their piece of the legacy was secured.

2. Split the Operation Into Enterprises

Cattle and grain farm. Four sons. Three stayed close. One left.

Instead of chopping everything four ways, the parents broke the operation into separate enterprises:

• Son A got the cow/calf side.

• Son B took the feedlot side.

• Son C got the grain side.

• The off-farm son received life insurance and a share of savings.

They split assets in a way that matched each kid’s interests and skills and kept the operation from getting sliced into oblivion.

3. Recognize Sweat Equity

One son farmed for 25 years at low pay. He’d built equity the hard way, with time, labor, and sacrifice.

His parents baked that into the plan.

They used a financial formula to factor in his years of under-compensation and gave him a larger slice of the estate. The others got more liquid assets and they all knew the plan years ahead of time.

No one was surprised. No one was bitter.

4. Legacy Trust With Access Rights

A family with three kids: one on the farm, two off.

Equipment went to the on-farm child, but instead of splitting the land, they put it into a legacy trust that paid income equally to all three kids.

And the trust said the on-farm child got two advantages:

• First right to rent the land at a 25% discount.

• Option to purchase parcels below full market value.

Ownership was shared, but access was strategic. That made all the difference.

5. Sentiment Matters: Location, Location, Location

Not all acres are created equal. Some have stronger sentimental and emotional ties.

This family understood that.

They carved up the land like this:

• The home place and surrounding acres with higher sentiment and efficiency parcels went to the on-farm kid.

• The farther-out, less sentimental parcels went to the off-farm kids.

• The on-farm kid got a right of first refusal (ROFR) on any ground the others wanted to rent out or sell.

It wasn’t just about dirt. It was about legacy, history, and keeping the heart of the farm intact.

6. Pre-Sale With Discount + Offset

Some parents don’t wait until the will’s read.

One couple sold 160 acres to their son at 50% of FMV while they were still alive. When it came time to divide the rest of the estate, they knocked that discount off his share.

Result? Everyone ended up with what felt fair, even if the numbers weren’t even.

7. Dual Entity Structure

This farm ran with two entities:

• Operations LLC (machinery, livestock, business)

• Land LLLP (real estate)

Both kids got equal shares — but the on-farm child was the manager and general partner. That meant control stayed with the farmer, while ownership remained in the family.

Built-in buy/sell clauses prevented outsiders from buying in.

The beauty of using entities within an estate plan is the flexibility and control they provide.

8. Land, With Strings Attached

One daughter stayed on the farm. The other siblings moved away.

In the trust, the parents left all the land to the farming daughter — but with a condition:

It gave her what she needed to stay farming, while preventing her from selling the family farm, cashing out, and leaving her siblings with far less.

9. Use Life Insurance as a Lever

Two daughters. One stayed on the land. The other became a vet.

Their parents used a $2 million life insurance policy to “equalize” the estate.

• Farm daughter got the land and equipment.

• Vet daughter got the policy payout. (which she used to buy into a vet clinic)

Different paths. Different needs. But both walked away with a legacy they could build on.

10. Rent-to-Own Structure

One family structured a rent-to-own deal with their on-farm son.

He paid discounted rent on the home place for 15 years, while working full-time in the operation. That rent counted as equity.

By the time the parents passed, he had already paid off much of the land’s value. The other siblings received liquid assets that balanced the books.

11. Buyout Clause With a Discount

Three siblings inherited a ranch. Only one wanted to run it.

The parents included a clause in their estate plan:

• The ranching son had a 5-year window to buy out his siblings’ shares.

• He could buy them out at 80% of FMV.

• The deal was funded using life insurance and a contract-for-deed.

It gave him time, flexibility, and a fighting chance to keep the ranch running.

12. Rent-Free Window, Then Purchase Option

This couple held everything in a trust.

Their plan:

• The on-farm child could use the land rent-free for 10 years.

• After 10 years, he could purchase parcels at FMV.

• The off-farm siblings got a life insurance payout up front and would eventually receive land and/or cash when the trust matured.

No pressure to liquidate right away. No need to borrow big just to buy out siblings. It provided a runway to ensure a smooth landing.

The Takeaway?

Every farm is different. Every family is different. So every plan should be too.

There’s no one-size-fits-all solution. But there is one common thread: FAIR ≠ EQUAL.

You don’t protect the farm by pretending every kid wants the same thing. And you don’t protect your kids by ignoring the realities of farm economics.

Good succession planning starts early. It gets creative. And most importantly, it gets written down.

Families that wait until the funeral to talk money? They leave a mess.

Families that plan early? They leave a legacy.

Want to Keep the Farm in the Family?

Here’s what to do:

• Start talking now. Yes, even if it’s uncomfortable.

• Get everyone in the loop…especially the on-farm kid.

• Understand what each child really wants. It might not be what you think.

• Understand what is needed economically to continue the farm operation.

• Get help from a pro who understands ag, estate, and family dynamics.

• Don’t let perfect be the enemy of done.

You don’t have to have all the answers. But you do need a plan.

Because at the end of the day… Legacy Matters.

Upcoming Seminars

If you’re in the SD area, I’m presenting 3 seminars this week and next.

Two are on “How the OBBBA Impacts Estate Planning & Taxes” where we’ll dive into the recent One Big Beautiful Bill and what it means for your estate planning.

📅 Wed, Sep 3 in Platte, SD

📅 Fri, Sep 5 in Aberdeen, SD

Then, the following week I’ll be presenting on “Planning Through Change” - A refresher course on creating or updating your estate plan.

📅 Wed, Sep 10 in Sioux Falls, SD

Here’s the link to register for any of these FREE seminars:

I appreciate all of you who are committed to preserving rural legacies.

-Clint

DISCLAIMER: What you just read is not legal advice. It is not an offer to represent you or perform legal services. Reading this doesn’t enter us into an attorney-client relationship. It’s just informational and hopefully a bit entertaining—take it as that and nothing more. When in doubt, talk to your own lawyer.