Farmers, more than most people, need to have carefully thought out succession and estate plans.
Most farm operations in the U.S. are still classified as family-operated businesses. When some people think of “family farms”, they think of small operations that can easily be handled by one or two people.
However, people who live in rural areas, especially farmers themselves, know that family farms are much bigger today than they are in the popular imagination.
Family farms can be gigantic operations with many employees. Farmers have to know how to navigate often complex government regulations, lending practices and supplier requirements, all while keeping an eye on volatile commodity prices.
That means farmers need to plan their estates carefully, if they want the farm to keep operating after they pass away.
This topic was recent taken up by the Wills, Trusts & Estates Prof Blog in “I’d Bet the Farm on It!”
The most important thing for farmers to do is often the most difficult. That is figuring out who is going to inherit the farm and continue running it.
Not every family member will have the knowledge or desire to run a farm. Sometimes, it might even be necessary to make arrangements for someone else to operate the farm, after the owner passes away.
Once it is determined who will run the farm, figuring out how others in the family will receive a fair inheritance is necessary to avoid any family fights.
As the bulk of most farmers’ assets are tied up in their farms, this is where estate planning needs to come into play.
An estate planning attorney can devise methods to ensure that everyone in the immediate family receives a fair inheritance, while still leaving the farm operations to the one person who is capable of actually running the farm.
Reference: Wills, Trusts & Estates Prof Blog (May 19, 2017) “I’d Bet the Farm on It!”