Estate planning for a farm can be difficult especially when it is a family affair that has a parent running the operation in addition to children and other family members participating in management. However, having the entire organization combined in the form of one person can be problematic in many situations such as the death of the parent or as new family members come into the fold. As a result, it can be a good move to split the farm into two business entities with one holding that land and leading it to the second business and the other actively managing farming operations. A LLC or corporation can do the trick while allowing ownership to be easily apportioned among family members particularly when new relations are joining the business. In addition, having the operations segregated from land ownership can allow for one particular family member to profit fully from managing the farm while protecting the land from being completely taken over when others will likely expect a stake often through inheritance. While this method is not an absolute requirement to properly plan for a farm, it is a good way to proceed when a division of interest would be for the best of all involved.
See Kevin Spafford, 2 separate entities enhance farm succession plan, Delta Farm Press, March 8, 2016.
