Family farms are the backbone of our country’s industry, and maintaining and preserving their integrity for years to come is no small task. Estate planning gets to be a little tricky when it comes to the farm, since it is your personal property as well as your business. Having a clear plan in place will ensure the best chances for success when it comes time to pass the reins down to the next generation.
Get Organized and Have a Talk
All too often people think that things will sort themselves out when it comes to estate planning, but just the opposite is true. If you don’t have a plan in place for your family farm, your hard work and dedication could end up in the hands of the state until they figure out what to do with it.
Make sure all of your documents are in order and that others know where they are. Items like deeds, tax statements, and loan paperwork all need to be easily accessible. Sit down with your heirs and create a written plan, discussing how the farm is currently operating and what kind of income it will take to maintain it in the future. Figure out who in the family is on board with continuing the family legacy; some might not see farming in their future, and it’s best to know that ahead of time.
Decide How You Want to Move Forward
Your farm can be passed down to your heirs in a number of ways. You can document it as part of your will, and could even split up parts of the farm to different family members. A will gives you the flexibility to designate what parts of the farm go to each individual.
If you want to take a business approach, your farm must be documented as a business or corporation, and shares could be dispersed to family members. Viewing it as a business might encourage your children to view it more seriously as an investment and would allow time for training long before they are solely responsible.
Lasty, the farm could be noted in a family trust or gifted to your successors. Both of these options allow specific guidelines for documenting how the farm should operate in the future. Because there are so many complexities with how your family farm can be passed down, it’s essential to work with a professional to explore your options and set up the best plan for your family’s future.
If you need help with estate planning, specifically with a family farm, let Hulbert & Associates help. We will work with you to ensure an outcome that meets all of your family’s needs.
