The current attorney is telling us that by law, we are required to visit a mediator ( at the cost of $15,000) before this can go before a judge. This seems strange to me... i cant find any laws referencing this anywhere.
I am not an Indiana attorney, but it strikes me that a practical solution to this problem would be for the two who do not want to sell to buy the others out. If there are other assets, these can be used as an offset, if the two have difficulty paying for the property. I do not see how spending $15k is going to help anyone, here. Of course, if this person is YOUR attorney, then you either need to take his/her advice or seek a new attorney.
There may be more to this matter than what you have shared, in which case, mediation may be absolutely necessary. A judge is not likely to allow any beneficiary to hold up administration of an estate, indefinitely, if there is nothing that can be done to satisfy their objections. In other words, if the two cannot buy out the three, then the property would likely be ordered sold.
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Attorney Frederick has given a good answer. I would add that even if the farm was distributed out of the probate to all five children, the three who don't want to be farmers should be able to petition the court to partition (divide) the property and then sell their 3/5th share.
Mediation in a family matter is not required by any law or statute, but the judge may have ordered mediation; or even the will/trust may have required mediation. It's often a good opportunity to see how this could get settled. But PRIOR to mediation, you need to know your rights, obligations, options and the potential consequences of each!
I recommend the 3 get their own attorney for this specific issue to discuss their options and the consequences/costs involved with each option. It will be much less costly than $15,000 and the 3 can share the cost. Besides, the estate/executor will have its legal advisor there, so it's important for the estate beneficiaries to seek their legal advisors as to what rights or obligations they have or that they might give up in any settlement.
The 3 who wish to sell could ask the other 2 to buy out their interests -- or form some business interest that receives the cash rent and proceeds from the farming on a pro-rata basis. There are other possibilities, too. If no agreement can be had, then the 3 can petition for a partition of the real estate and sell their respective portions. Of course, you may lose value when you split up the acreage and you will have ingress/egress issues. For these and many reasons -- not the least of which involve tax concerns and today's market value for farmland -- the 3 should consult their own separate attorney to lay out all pros, cons and consequences and come up with a viable offer to the other 2.
The converse, of course, is also true for the 2 who wish to keep the farm -- they should hire an attorney to represent their mutual interests and to propose or negotiate a plan forward.
veRONIca jarnagin, atty, pc
veRONIca jarnagin, atty, pc 317-253-7664 provides this response as general guidance and not specific legal advice. If you wish to receive specific legal advice for your situation, please call to schedule an appointment.