Local Attorneys Helping Long Island Family Farmers with Estate Planning
New York is no stranger to family farms. In fact, there are plenty. Whether you own a large commercial farm or a small family range, it is important that you protect it. Farms are not just a way of living anymore; they are a way of financial support. If you don’t take steps to protect the succession of your family’s farm, your legacy could end abruptly upon your death.
When you plan out the future of your family farm, you will have unique issues that a typical estate plan won’t address. For example, you may have children working on the farm, while others are not. But, you still need to determine how the farm will operate in the future and how your estate will be equally divided among your heirs.
Building an Estate Plan is Critical
According to the U.S. Department of Agriculture (USDA), the average assets for a large family farm was estimated at $4.5 million in 2014. That value alone is reason enough to create a succession plan – even if you feel like you don’t have the time.
Ideas and Solutions for Protecting the Family Farm
There is a way to create a succession plan while still distributing your estate’s assets accordingly. Some common ideas include:
- Have the “farming heir” purchase the farm when parents reach retirement age. When parents have reached retirement age, the child who is inheriting the farm can purchase it outright from his or her parents. The proceeds can then be added into the parents’ estate plan so that it can be equally divided among all children (those who work for the farm and do not). The only issue is that the farming heir would need to be able to afford the farm or have access to funding for that purchase.
- Have the farming heir buy the farm after death. Another option is to allow the farming heir to take advantage of capital gains tax by buying the farm after death. The heir may have to pay more, however, if the farm’s value increases by the time his or her parents pass away. Parents could agree to a pre-set purchase price and list that in the estate plan to avoid inflation costs. Also, the parents can structure the estate so as not to be divided until after the farming heir has purchased the family farm.
- Parents can split the farm among all children. If there is no farming heir or no child can afford to purchase it, the parents also have the option of parsing out the farm or giving each beneficiary interest in the farm. The farming heir could also rent the property from other heirs while running the family farm so that everyone enjoys the assets equally, but family still runs the farm.
Speak With an Estate Planning Attorney To Explore Your Family Farm Succession Options
To protect your family farm, create a succession plan and estate plan that treats everyone fairly by speaking with an attorney in New York. The Law Office of Andrew M. Lamkin, P.C. can help you create a succession plan and protect your family’s assets. Schedule a free consultation now at 516-605-0625 or request your consultation appointment online.