What are my options? “There are two different ways to pass down your assets. You can divide them equally among all children, whether or not they are involved in the farming business, or you can look at what’s fair,” says Elizabeth Rumley, staff attorney with The National Agricultural Law Center at the University of Arkansas.
“A lot of people say, ‘We’re just going to divide it. I have three children. They each get a third of my property upon my death.’”
Yes, that is equal, Rumley says, “but it’s probably not going to be able to maintain itself as a business moving forward.”
Here are some alternatives:
• LIFE INSURANCE. The proceeds from your policy would go to the off-farm heirs and the assets from the operation of the farm stay with the child that’s working on the farm.
• GIVE CASH OR OTHER LIQUID ASSETS.
• FORM A FAMILY CORPORATION. This option gives each heir shares in the corporation so everyone receives some proceeds from the farm. If you choose this approach, consider giving the farming child what’s called the ‘right of first refusal,’ which gives that person the right to buy the other children’s shares before they sell them to anyone else. “It keeps the farm in the family and the assets in the family,” Rumley says.
• PUT IT INTO A TRUST. For more information, type “Advice on putting assets into a trust” into the “Search” box at dairyherd.com