For many South Dakota residents, farming is their lifeblood. Farming is what their parents did, and before them, their grandparents. These farmers hope to pass the family farm down to their own children and continue the lineage that keeps them connected to the land they love.
But that can be challenging at times, especially in these uncertain economic times when family farms are becoming an anomaly among vast corporate farms. What can a farmer do?
The first thing any farming family needs to do is be very clear about their intentions for the disposition of the family farm. This is likely to be the biggest asset you have to leave your heirs. Both you and your spouse should be on the same page when it comes to the farm.
Then, once the two of you have settled that, communicate your intentions to your heirs. You want to avoid the infighting and bickering that can accompany the division of your estate. If you have one son or daughter who works the farm with you and your other adult children work in the private sector, how will you divvy up the ownership of the farm? Your farming child will need a certain percentage of land and assets to make a decent go of it, but what about your remaining children?
Your estate planning attorney can recommend options, including trusts, that will allow all heirs to derive an income stream from the farm and its proceeds. Some of your children may want to sell their interest, and provisions can be put in place to facilitate those transactions as well.
The bottom line? You want to avoid rancor and hurt feelings between your heirs when you are no longer here to play peacemaker.