Indiana Farm Succession Planning Attorneys
For Indiana farm families, land is more than an asset — it’s a multigenerational legacy. Passing a farm to the next generation often involves more than a simple deed transfer. It requires a plan that considers tax implications, protects the farm operation, and accounts for the relationships between family members who may have different ideas about the land.
Parr Richey, has deep roots in Boone County and has advised farm families throughout rural central Indiana move from one generation to the next without disrupting the farm operation itself.
Keeping the Farm Intact
Farm transfers are rarely straightforward, since they often involve land, equipment, and an active business. The land itself is often the most significant asset which dominates the rest of the estate. This can create problems if one heir wants to continue the farm operation but cannot afford to buy out their siblings who have no interest in farming. There can potentially be a significant tax burden if the estate exceeds the federal estate tax exemption amount.
Our goal is to help you find the best solution for your family to prevent business interruption and disagreements. Whether your plan involves trusts, business entities, buy-sell agreements or other estate planning tools, we can help create a strategy tailored to your family’s goals.
Legal Tools for a Smooth Farm Transfer
Farm succession planning can utilize different legal structures depending on your specific needs and desires.
- Limited liability companies (LLCs). An LLC allows you to transfer ownership to your heirs gradually during your lifetime by transferring portions of your ownership in the LLC, while also providing your family limited liability protection. Sometimes, an LLC is established after death so the heirs have defined roles in the farm operation with one person in charge of managing the day-to-day operations.
- Trusts. Trusts can keep land intact and in the family while allowing your heirs to receive the farm income. They can also provide legal protection in the event of divorce.
- Buy-sell agreements. These set clear terms for how a family member can exit the business and typically give those farming the land a right of first refusal to buy the interest of the selling family member at a stated price.
- Right of First Refusal. These allow you to give one of your heirs the right to purchase the farm from the other heirs upon the timing, method, and manner described in the right of first refusal.
Managing Taxes and Risk
Taxes are often a major consideration in determining how to transition the farm between generations. Although federal estate tax does not apply to most individuals, it is a prudent consideration for farmers given the rising value of farmland. Additionally, without proper planning, transferring or selling the real estate could result in significant capital gains taxes. We work with you and your tax advisor to prepare an efficient strategy and avoid costly consequences.
Talk to Our Estate Planning Team
Your farm is your family’s most valuable asset. Whether you operate in Boone County or rural central Indiana, we can help you plan for the future.
Call 317-269-2500 or contact us online to schedule your farm succession planning appointment.