I have been married to a loving wife of 12 years. I will call her Marie. Her family including her dad and 4 adult siblings own and run a 180-acre farm in Minnesota. Because this farm is only 25 miles from Minneapolis, the land is valued in the millions of dollars. The farm has no liens. The corporation also has 6-figures sitting in a savings account. Marie's dad and sister (I will call her Terry) work the farm full time. The rest of her siblings each have their own careers separate from the farm but pitch-in whenever needed. Marie has a career here in Arizona and obviously can't work the farm to any degree.
When Marie's mom passed away several years ago, her dad transferred her mom's share of ownership of the farm (corporation) to Marie along and her 4 siblings. This past month, Marie's dad passed away God Bless him. Now Marie and her 4 siblings are all equal partners in owning this farm. The family decided to hang on to the land and keep the farm running. Marie's sister Terry has always lived in the farm house and continues to be the primary Manager running the farm full time.
Here's the issue; Marie was told by her siblings that although she will be partners if and when the farm and land sells, that she (Marie) gets no share of the business profits because she doesn't participate in running the business. Apparently, the profits all go to the 4 other siblings as well as into the farm account. The 6-figure bank account is there "just-in-case" the farm needs anything.
Granted, her 3 brothers pitch in to help Terry now and then should be compensated for their effort, but isn't Marie also entitled to some degree of the profits simply because she is 1/5 owner of this corporation?
She shrugs it off as " oh well, we don't live in Minnesota anymore so we can't help on the farm. Besides, my family knows what they're doing". I love her family and they are all straight-up people, but I can't help but to think that Marie is getting the short end of the stick. Although hypothetical and not likely, it still would be simple for Terry to go out and buy say, a new Hummer using the 6-digit savings account owned by the farm corporation and call it a business expense. There is nothing legally in place that calls for each sibling to agree on any major expenditure. In the mean time, Marie, and each of the siblings continue to live modestly with typical struggles to make ends meet.
I have 3 questions; 1) is Marie entitled to some sort of income at all on this apparently profitable corporation? 2) Is there a smart way to access any of this farm equity or savings to invest as we choose? 3) is Marie entitled to mention the business or the land as an owned-asset when applying for loans, etc.? Thank you all in advance
When Marie's mom passed away several years ago, her dad transferred her mom's share of ownership of the farm (corporation) to Marie along and her 4 siblings. This past month, Marie's dad passed away God Bless him. Now Marie and her 4 siblings are all equal partners in owning this farm. The family decided to hang on to the land and keep the farm running. Marie's sister Terry has always lived in the farm house and continues to be the primary Manager running the farm full time.
Here's the issue; Marie was told by her siblings that although she will be partners if and when the farm and land sells, that she (Marie) gets no share of the business profits because she doesn't participate in running the business. Apparently, the profits all go to the 4 other siblings as well as into the farm account. The 6-figure bank account is there "just-in-case" the farm needs anything.
Granted, her 3 brothers pitch in to help Terry now and then should be compensated for their effort, but isn't Marie also entitled to some degree of the profits simply because she is 1/5 owner of this corporation?
She shrugs it off as " oh well, we don't live in Minnesota anymore so we can't help on the farm. Besides, my family knows what they're doing". I love her family and they are all straight-up people, but I can't help but to think that Marie is getting the short end of the stick. Although hypothetical and not likely, it still would be simple for Terry to go out and buy say, a new Hummer using the 6-digit savings account owned by the farm corporation and call it a business expense. There is nothing legally in place that calls for each sibling to agree on any major expenditure. In the mean time, Marie, and each of the siblings continue to live modestly with typical struggles to make ends meet.
I have 3 questions; 1) is Marie entitled to some sort of income at all on this apparently profitable corporation? 2) Is there a smart way to access any of this farm equity or savings to invest as we choose? 3) is Marie entitled to mention the business or the land as an owned-asset when applying for loans, etc.? Thank you all in advance