The family farm is a sacred asset for many Midwest families. The heritage and legacy of these families started on farms, and there are deep roots tied to the preservation of the land.
The challenges facing family farms are fairly well-documented these days, but one of the greatest challenges is that the owners of these farms are growing older, which leads to concerns about their personal long-term care needs. Unfortunately, there are many times where insufficient planning fails to protect this important asset. And with the loss of the family farm there is a loss of family legacy, history and identity.
While each family’s story surrounding their farm is unique, there is one simple step that every family can take to preserve the family farm – create a well-designed plan for the farm with an experienced estate-planning attorney.
The landowners need a clear plan while they are living, but they also need a plan for their eventual passing. While taking the initial step to protect the farm may be simple, the plan itself often becomes complicated for the typical family. This is why it is so important to consult with an experienced attorney who can guide you through the steps in the process to develop a plan unique to your family and circumstances.
7 Things to Consider When Planning For and Preserving the Family Farm
1. Business Entities – What type of business entities should be established now for the family farming business, and perhaps separately for the family farm assets? Many farms are owned simply in the name of the owners, which creates additional risk.
2. Long-term Care – How are the family farm owners going to pay for any of their long-term care needs? Where will the cash come from to pay for this care?
3. Next Generation Farmer – Who will actually continue the farming of the land? Or should the family start developing non-family alternatives?
4. Taxes (Estate and Income) – What kind of tax considerations need to be considered now and in the future?
5. Family Harmony – How are the current owners (parents) going to make sure there are no internal disputes (among their children) on the future of the farm after they are deceased?
6. Asset Protection – What are the best alternatives for protecting the family farm after the owners’ death? How do we keep the next generation from losing the farm for the grandkids?
7. Planning Team – Who can the owners trust with their planning, and what financial and investment alternatives should they leverage for the future? This isn’t a one-time plan, but it will be an evolving planning process.
The answers to these questions may be similar for many farming families, but they can also be completely different based on the dynamics of each family. Unfortunately, many farming families are finding the kids leaving the farming business and moving toward other careers (and urban lives). This makes planning ahead that much more important for families with farmland.
There is no one “cookie-cutter” solution for family farming, but there are common elements that many families leverage for their own plans. Bell Law Firm fully understands the importance of protecting this family asset, and we look forward to an opportunity to assist farming (and landowner) families with their unique needs. Give us a call at 913-345-2323 with your questions or concerns about preserving the family farm.