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5 estate planning questions for farmers to consider

On Behalf of | Mar 7, 2024 | Farmers and Landowners

Farmers, ranchers and landowners in North Carolina have unique estate planning needs. A thorough estate plan helps protect your property and guard against the uncertainty of the future.

However, getting started with estate planning can seem daunting. To help identify the needs and goals of your property or family farm, start by considering the following five estate planning questions.

What do you want to happen to your land?

Whether the farm or property has been in your family for generations or is new to you, you have likely developed a strong attachment to the land and a sense of pride. Keeping it in the family may be a priority. In other cases, you might wish to sell to an outside entity. After likely many years of working on the land, think about what you want your legacy to be, as well as what you envision for the property when your successor takes over.

Will the farm business stay in the family?

You might have children, siblings or other family members who have worked on the farm for years and who share their attachments to the property. However, instead of assuming someone will want to take over the responsibility, think critically about what a transition might look like. If you choose to keep the property in the family, you will want to consider whether to sell the farm to your heir(s) or pass it down through your will or trust.

Who can manage the farm?

After managing the agricultural business for years, choosing a successor is an important consideration. Your successor should be familiar with the day-to-day operations of the farm and want to take over the business. In some situations, there may be multiple candidates for the job – perhaps you have siblings interested in the role or multiple children who are actively involved. In these cases, it is critical to maintain transparency and document everything to minimize conflict and help ensure a smooth transition.

What does retirement from farm work look like?

Many agricultural professionals reinvest their returns on their cattle, poultry or crops into the farmland that they own. They may acquire new property, put down field tiles and build new edifices instead of funding a retirement account. Therefore, you may not have liquid capital available to fund a retirement or transition to a nursing home. Creating an estate plan early can help plan for your future retirement to ensure there are funds available for whatever your retirement years have in store.

Could the farmland be at risk?

The last and possibly most uncomfortable question is to ask yourself whether personal or family circumstances could endanger the farmland. Perhaps your children might fight with each other and eventually decide to sell off the property instead of working on the farm. Maybe the heir who takes over the farm and inherits the land later divorces, putting the land at risk. Maybe the farm has had financial issues that have complicated finding a successor. It is critical to examine these possibilities to find the solution that works best for you and the land.

Seek help with estate planning

Farmers, ranchers and landowners planning for their legacies often need to think about long-term sustainability and legal protections for their farms. Trusts can help provide a degree of oversight into farm operations and protect farmland from divorce or litigation. More broadly, discussing estate planning priorities in depth with a skilled legal team can help you draft the best estate planning documents possible for your unique circumstances.