You’ve had a family farm for generations, and you want to make sure it stays in the family even after you pass away. That’s why it’s important to make plans for your farm in your estate plan. You have two children, both who want to take over the farm in the future. Planning for succession is a serious topic that it may be time to discuss.
There are many factors that will influence your succession planning, such as how the farm is going to be sustained in the future and how you want to divide the farm, whether equally or equitably. If one of your children decided not to move forward with running the farm, you would also want to consider how to disinherit them or change their inheritance of the farm, depending on what you’d like to see happen in the future.
Did you know that any farming heir has the potential to buy the family farm from their parents? That’s something that you might consider rather than trying to account for succession after your death. How this works is that your heir or heirs can purchase the farm once you reach retirement. However, this can create tax issues for you, so it’s smart to talk to your attorney before agreeing to this plan.
Another option is to pass the farm on after your death so that you can eliminate capital gains taxes and other costs. This may end up costing your heirs more money in the future, however, which is also another thing to consider when you speak with your attorney.
There are many solutions to the problem of passing on the farm. Consider taxes and expenses to yourself and your heirs before choosing the one that suits your situation.