The summer months can be a great opportunity that allows farmers to take care some “legal housekeeping” items.
One of these “housekeeping” items that farmers can take care of is updating their estate plan. Updating an estate plan, whether it be a will, trust, or transfer on death deed, is something that all individuals need to stay on top of. Family situations change constantly, and in a family business such as farming, staying on top of what happens with the operation should be a high priority. Furthermore, estate tax laws change frequently; it is important to plan accordingly.
Farmers should also consider the possibility of converting the family farm into a Limited Liability Company (LLC). An LLC can provide an operating entity which can facilitate how the farm is run by using smart business practices. Another benefit is personal liability protection for its members from business debts and claims. LLC’s can also be a form of estate planning. They can be a great way to reduce estate taxes as well as provide guidelines for how the farm is run, as the operating agreement of the company specifically address these stipulations.
Double checking all beneficiary designations on all your insurance policies and investment accounts is something that should be checked regularly. One needs to be sure that if he or she has any form of insurance policy, that the beneficiary is who they want it to be as it cannot be changed once one is deceased. The same applies to all banking and investment accounts. Having these designations correct prevents the benefit from possibly going to the wrong individual and makes the process easier for the intended beneficiary to collect.
Another “housekeeping” item that farmers can think about in the summer is what they are going to do with rental land. Whether one is the landlord or tenant, many farmland agreements require notice to be given in October to the other party if either party plans on terminating the agreement. Even though this October deadline is not always the case, the summer can be a great time to review the contracts to be sure there are no surprises come fall.
Further, summer months offer a time to reevaluate the size of the farm. The planting process is fresh on a farmer’s mind, which can help influence a decision if any changes to the size of the farming operation are needed. One must look at how the farmland has done in the past and make the decision on if they would like to expand the farm or possibly shrink the farm. If a farmer wishes to decrease the amount of farmland but does not wish to sell any land, there is the possibility of putting land into a conservation program. Enrolling farmland into conservation programs can have huge tax benefits and be great for the surrounding land and wildlife.
Future finances are another topic that should be addressed in the summer. Whether it be examining financing documents on property and equipment, or even looking at different contracts for commodity sales, figuring out what is the best future financial option for you and your farm is always a good idea.
Coming in for a meeting also allows the possibility to discuss any changes in the law that will impact your farming practice. Dicamba has come under immense pressure these last couple years and many states are enacting laws restricting its use. Farm protection laws, also referred to as “ag gag” laws have passed in surrounding states and further laws may be passed in Minnesota. There are many legal issues dealing with agricultural in today’s world and scheduling an appointment will make sure you are prepared for the future with all of these pressing issues.
Interested in meeting with one of our experienced farm lawyers? Call (507) 288-5567 today to schedule an appointment. You can also book an appointment online at www.wardoehler.com/book-online.
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