If you are a farm owner who would love to see your farm passed down for generations to come, it is important that you pay attention! Simply coasting through your last decades of life, not updating your farm transition legacy plan may cause you to miss some key items. Has the game plan that you would like to implement with your family farm been truly fulfilled? If you would like to leave the family farm to your children, a regular review of your farm transition legacy plan is a necessity. Our team at Dunncreek Advisors is here to help ensure that everything is in place!
Evaluate the Whole Picture
Too frequently, the mother and father who own the farm don’t think everything through. Simply setting up a revocable trust with your child being the sole backup trustee may not be enough. This would give your child control over the farm business should the mother and father pass away, but what about the land? To ensure that the transition of the farm to your child goes smoothly, the land needs to be owned by the trust as well. Who owns the land is just as important as who is listed as the trustee on the trust.
Are all Family Members on the Same Page?
If the land isn’t owned by the trust, you may be setting your family up for conflict down the road. What if another child begins to feel like the a certain child is being favored? With age, unfortunate conditions such as dementia develop in parents. That sibling could have a conversation with the surviving parent struggling with dementia and convince them that the farmland should be split between all of the kids. While this may seem fair to the other siblings, it could become devastating to the farm. Next thing you know, the child who is working hard on the farm is having to pay rent to utilize the land that the family farm is on, simply because the full game plan was not implemented by the parents.
This example is a reminder of how important it is to periodically review the farm transition legacy plan with professionals. Easy misses like the situation above can be devastating to the longevity of the farm. Reviewing your legacy plan documents with our professionals at Dunn Creek Advisors every 3 to 5 years to ensure the plans are still current is a great start. The last thing that you want for your family is to stir up conflict down the road between your children.
If this article has you starting to think about your farm situation, get in touch with my office at email@example.com. I always enjoy meeting with people who have started thinking about these often complex topics. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.