Although family farms are dwindling across the United States, there are plenty of them still operating. Some of them have even adapted and are quite profitable. If you own a family farm, estate planning is crucial to ensure that the farm stays in the family and remains profitable.
One of the biggest issues surrounding the inclusion of a family farm in an estate plan is to whom you will leave the farm when you die. Frequently, not all of the next generation has an interest in the daily running of the farm. This can create a significant obstacle when deciding how to split your assets among the children because farm assets are usually tied up in the farm itself. Dividing the farm up isn’t a viable solution nor is selling off farm assets in order to create equal gifts to beneficiaries.
The good news though is that there are numerous options available. The creation of an entity such as a limited liability company, a family limited partnership or a corporation, for instance, afford you the ability to divide the profits of the farm without having to physically or legally divide the farm itself. In addition, by creating one of these entities, you can allow a beneficiary who wants to run the farm the ability to do so while not pressuring others who have no real interest in taking part.
Make sure that you consult with your estate planning attorney to decide which option is best for you and your family farm.
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