Estate planning for a farm for generations to come is more than preserving an individual’s wealth and hard work; it also preserves a way of life. There are several ways to help ensure that a farm within a family is not sold as a subdivision or commercial property.
The number one way to help ensure the legacy of a farm is to have a plan and keep it up to date. Farmers who have multiple children, especially when not all of the children would like to continue the family farm, can assemble a team of professionals to help them craft an estate plan. If an estate plan already exists for the particular farm, then keeping it up to date is needed.
Many farmers and ranchers rely on joint accounts or naming an individual as the beneficiary of various insurance plans. This is not the most ideal method as subsidies can be left without being properly used. In addition, having a jointly owned farmland property sometimes requires the current owner to give up some portion of their ownership. Using trusts or title inheritance can help dictate the farmland’s use after the owner’s passing. Finally, farmers must not overlook liquidity needs. Liquidity may help pay for the necessary bills outside of the day-to-day operations such as medical bills, attorneys, accountants and others. Therefore, a liquidity plan should be part of the estate planning as well.
If an individual owns a farm, now is the time to begin estate planning. An attorney with experience in estate planning and probate may help draft the appropriate documentation and assist in understanding what needs to be done to ensure a continued legacy and family farm.