Who gets the farm is only one piece of an estate plan.
For farm families, the bigger questions can start much earlier. Who can make decisions if an owner becomes incapacitated? Can the operation keep running if a parent needs long-term care? How should land be divided between farming and non-farming children? What happens when siblings have different ideas about what should happen next?
Those questions carry even more weight when land represents a large share of the farm’s value.
Farmland values have continued to hold up across much of the Midwest, even as commodity prices and farm margins have come under pressure. A mid-year benchmark report covering eight states showed farmland values up 1.9% over the first six months of 2026 and 3.5% over the past year. Values were up 53.6% over five years.
For a farm family planning the next generation, those numbers can make land ownership harder.
Troy Schneider, Shareholder and Attorney, Menn Law Firm, encourages producers to look beyond wills and inheritance when building an estate plan.
“A well-developed estate plan assures your goals for your family and the farm continue to move forward after your death,” Schneider says.
Speaking on a recent webinar hosted by PDPW, Schneider walked through the documents, tax rules and family dynamics involved in deciding where an operation goes next.
Start with the Farm and Family
Estate planning has become a bigger conversation across agriculture. Still, too many producers view estate planning as a stack of legal documents rather than a plan built around the farm, family and financial picture.
“In a nutshell, a good farm estate plan really just starts with good information,” Schneider says.
Before deciding who gets what, Schneider encourages families to take an honest look at:
- How well the farm is cash flowing
- Whether successors are ready for ownership and management
- How siblings handle conflict
- Which assets the farm needs to keep operating
- What non-farm children should inherit
- How a nursing home stay or long-term illness could affect farm cash flow
Most families are working toward similar goals. The challenge comes in deciding which goals take priority.
“It’s really the estate planner’s job and their advisors to try to help the couple prioritize these different objectives,” Schneider says.
Plan for Disability, too
Estate planning often brings up one question: Who gets the farm when the owner dies?
Schneider wants farm families to ask another question first: What happens if an owner can no longer make decisions?
“Estate planning is talking about those two different circumstances: your disability and to transfer assets upon death,” he says. “Both are an important part of an estate plan.”
For disability planning, Schneider considers financial powers of attorney and healthcare powers of attorney essential.
On the financial side, he favors a durable financial power of attorney, which continues if someone loses the ability to make decisions.
“You designate people to manage your financial affairs if you aren’t able to, and you can amend and revoke that document any time,” he explains.
Farm families should carefully consider who receives this authority. Schneider recommends:
- Selecting agents or co-agents carefully and including accountability requirements
- Considering separate farm agents for operational decisions
- Making sure agents have authority to guarantee loans, divest assets if long-term care becomes an issue and handle gifting
Without a financial power of attorney, a family can end up in court seeking a guardian of the estate.
“If you didn’t have this financial power of attorney, you have to go to court to get what’s called a guardian of the estate appointed,” Schneider says. “You want to avoid that by just having this document.”
Healthcare powers of attorney deserve the same attention. Schneider prefers giving a healthcare agent broad discretion rather than relying solely on a state form with a series of boxes to check.
“My preference for a healthcare power of attorney usually lies in giving your healthcare agent broad powers to make healthcare decisions for you,” he says.
Age and circumstances can change how someone views healthcare decisions, he notes, so flexibility can be important.
“If you’re somebody who’s in your 60s or 70s, you might approach your healthcare decisions differently than if you’re in your 80s or 90s. The check-the-box method doesn’t really account for that kind of flexibility.”
His advice is to choose people you trust and give them the authority to make decisions when needed.
Land Can Complicate the Plan
For many farm families, land is where estate planning gets difficult.
Farmland values have remained. The latest eight-state benchmark report showed values up over the past six months and year, with farmers and ranchers continuing to make up much of the buyer pool.
That strength can be good news for the balance sheet, but it also can create a bigger gap between the value of the farm and the amount of income the farm generates.
It can also make dividing an estate among children more complicated.
Parents may want to treat every child equally, but putting multiple heirs on the same piece of land can create ownership problems for the next generation.
Co-ownership can work, but Schneider says it needs rules. Trusts can include:
- Clear decision-making procedures for jointly owned land
- Limits on who can receive ownership if a sibling wants out
- Buy-sell provisions giving remaining owners the first opportunity to buy
- Discounts on exit prices when someone wants to cash out
Parents also may discount land transferred to farming children because the farm needs to keep those acres working. Schneider says clawback provisions can protect against a quick sale by requiring part of the proceeds to return to the estate or to non-farm siblings if land is sold too soon.
Age differences between children can create another challenge.
Consider a family where the oldest child is already managing the farm while the youngest is still in high school. A one-time transfer at the parents’ death could leave the younger child with little opportunity to return to the operation.
A trust can spread transfers over time.
“There’s provisions in your trust that can be used to transfer assets over a period of time,” he explains. “We might want to build provisions that hold back farm assets, so that the one that’s on the tail end has the same opportunities as their older siblings.”
Because farming children often receive more business assets and take on more risk, Schneider says life insurance can be used to provide assets for non-farm children. The goal is not necessarily to make every inheritance identical. It is to create a plan the family believes is fair and can live with.
Fair Does Not Always Mean Equal
Perhaps no part of farm estate planning creates more family discussion than deciding how to divide assets between farming and non-farming children.
Schneider does not have a one-size-fits-all answer.
“Everybody’s value systems are different. Everybody’s financial situation is different. Everybody’s readiness is different. Everybody’s got different numbers of kids, so there truly is no right or wrong answer with regard to what is fair,” he says.
Instead, families need to decide what fairness looks like for them and build the plan around those priorities.
“Basically, you have to take your priorities and your situation, and work with your advisors to see what magic formula of what is fair,” he says.
Use Trusts to Carry Out the Plan
For Midwestern farm families, Schneider sees a revocable living trust and marital property agreement as common tools, particularly when the goal is to avoid probate and make asset transfers easier.
“The disadvantage of a will is you have to go through probate court to transfer assets upon death, versus if you use a trust, you don’t have to,” he says.
A trust also can do more than direct where assets go.
“The nice part about a trust is it often provides the opportunity to state your intentions,” he says.
Schneider points to the idea of an ethical will, which allows parents to pass along their values and beliefs alongside their financial assets.
“There’s this concept called an ethical will it just is basically a transfer of your value system to your heirs.”
In some ways, a trust can allow parents to continue providing direction even after they are gone.
“A trust drills down into you being able to speak with your loved ones from your grave,” Schneider says.
Of course, someone has to carry out those instructions. Schneider encourages families to spend as much time considering trustees and other fiduciaries as they do the documents themselves.
“If you don’t know how to do something while you’re alive in your estate plan, at least appoint the right people because good people make good decisions,” he says.
More than one person can provide accountability, while an independent trustee can sometimes help when siblings have different interests. Schneider also discusses roles such as trust advisors and trust protectors, particularly when a trust could remain in place for years after both spouses die.
Trust protectors can provide a way to make certain adjustments if circumstances change after a trust becomes irrevocable.
Check the Beneficiary Designations
One of the easiest pieces of an estate plan to overlook may be sitting in an insurance policy or retirement account. Schneider strongly encourages families to review their beneficiary designations and make sure they align with the rest of the estate plan.
“I can’t stress to you how important reviewing your beneficiary designations are,” Schneider says.
Those designations can move assets outside probate, but problems can arise when they conflict with a trust or other estate planning documents.
“Sometimes what happens is you put the beneficiary designation one way, and your revocable trust provides for your plan of distribution in another way, and they’re not aligned with each other,” he explains.
For many first-marriage farm families, Schneider often recommends listing the spouse as the primary beneficiary and the trust as the contingent beneficiary.
“Usually, it’s easiest just to list the spouse as the primary beneficiary, and then usually the trust as the contingent beneficiary,” he says. “Quite frankly, it cuts down on the paperwork if you just list the spouse.”
Probate can become more involved when there is no spouse or estate plan. It also creates a public record, which can be a concern for families who value privacy.
“One huge negative about probate court: it’s a court process, so anybody can go into the courthouse if you’re nosy enough and find out what the person had when they died.”
Keep the Plan Current
Writing a will does not mean estate planning is finished. Schneider says a will is only one piece of a much larger process.
“Many people think estate planning and writing a will are the same, but one is really just part of the other,” he says.
A broader estate plan can include:
- Retirement income needs
- Long-term care and nursing home risk
- Tax planning, including stepped-up basis and lifetime gifting
- Farm succession and management handoff
- Co-ownership of inherited land and business interests
- Protection of heirs from creditors and predators
Cost is another reason some farm families put off the process. Schneider says the core documents — financial and healthcare powers of attorney, a marital property agreement and a trust — generally fall within a broad range.
“You’re usually $1,500 to $4,000, somewhere in that range,” Schneider says. “Very rarely unless there’s a lot of meetings and a lot of changes it should not usually hit five figures.”
Larger operations with substantial land holdings or potential federal estate tax exposure may need more advanced planning. Schneider points to lifetime gifting strategies, minority discounts on entity interests and other structures as tools advisors may consider.
Those decisions require more individualized planning than a basic estate planning seminar can cover.
The land market is another reason to keep the plan current. Values can change, ownership can change and the farm’s financial position can look very different from one generation to the next. A plan written years ago may no longer fit the operation.
Schneider encourages families to revisit the plan as circumstances change.
“Do your estate plan, start early and change your estate plan along the way, and review it from time and make sure it is up to date to take account of the current situations that you’re currently in,” Schneider says.
For farm families, estate planning is ultimately about more than land, livestock and bank accounts. It is about giving the next generation a workable path forward while protecting the relationships behind the operation.
“With that, you can make the farm successful, and you can also have harmonious family relationships after you leave here,” he says. “Which is everybody’s goal.”
