Having an estate plan is an important investment in the future of your farm and family. Estate planning allows for the transition of ownership of property from one generation to the next. It can provide for the needs of all family members, even those who leave the operation. Proper estate planning can address the settlement problems that arise because land is not a liquid asset. An estate plan is more than a will. A will alone cannot guarantee a secure future for the farm family, land or business. The cost of not having an estate plan or of having a poorly devised transition plan is a cost that can be avoided with the proper steps. Below are resources that will help you plan for the future of your farm.
Estate Planning [543 KB pdf]- Iowa State Extension. This comprehensive document published by Iowa State University can familiarize farm owners and operators with issues, problems, and available tools related to estate planning.
Farm Business Entity Formation:
Deciding How to Structure Your Business [137 KB pdf]- North Carolina State University, 2004. Publication covers many of the common entity formations used in farm businesses: sole proprietorship, partnership, limited liability company, corporation.
Cooperatives [151 KB pdf]- Penn State University, 2005. This publication explains what a cooperative is, why one would consider starting one, and the financial and legal aspects of a cooperative.
Ownership Structures for your Farm or Ranch: Some Basic Considerations Center for Rural Affairs, [141 KB pdf] University of Nebraska-Lincoln. This article is not intended as a substitute for the advice of experienced counsel. It provides useful information in some detail but is general in nature. Much of what is said in this article will apply in all states, but laws governing entities do vary from state to state.
Two Generation Farming:
Getting Started [96 KB pdf] - Iowa State Extension. This publication explains the factors you should consider before selecting and developing a business transfer agreement. By carefully evaluating these factors, you increase your chances of successfully creating a two-generation business agreement.
Selecting a Business Arrangement [80 KB pdf] - Iowa State Extension. This publication contains several different types of business transfer agreements. To successfully transfer your business to the next generation, you must select the proper transfer agreement or series of agreements.
Making it Work [75 KB pdf]- Iowa State Extension. The underlying success of a business agreement depends upon healthy family relationships. Probably more two-generation business arrangements fail because of poor family relations than any other reason.
Transferring Machinery & Livestock [217 KB pdf]- Iowa State Extension. Once the younger party has made a long-term commitment to farming, the parties should consider how to transfer control and ownership of farm assets. This publication discusses considerations for transferring the use and ownership of personal property such as farm machinery, breeding livestock, and crop and livestock inventories.