Estate planning takes on a different level of importance and detail when you own a family farm. Advanced planning helps ensure that your property and the operation you have invested in remain operational and secure.
Although estate planning, in general, is reasonably straightforward, there are unique considerations when you plan for a farm.
1. What are your goals?
The first thing to consider when you start your farm’s estate plan is what you hope for the farm’s future and your estate planning efforts. For example, you might want to ensure that the farm stays within your family to carry on your legacy after your death. You might also need to establish your estate plan now so that you have the resources in place to address any long-term care costs for your future.
2. What are your assets?
Most estate plans contain clear, standard assets, including investment accounts and the planner’s home. A farm’s estate plan has more assets, including many you might easily overlook. Farms have extensive assets, including not just the land but also the equipment and machinery used to run the operation as well as the livestock on the property. Consider all of the assets the farm owns as you build the estate plan.
3. Who will you leave it to?
Consider your potential heirs carefully as you establish your succession plans. Many farm owners establish a trust to transfer the property and assets into as this protects their heirs from extensive tax implications. Make those changes early so you account for any 5-year look-back implications for your long-term care plans.
Farm properties need extensive preparation and consideration for proper estate plans.
