Many people use different succession tools when planning for the future, but not everyone fully understands the ins and outs of financial planning. This means that some of the documents used may not work how one thinks. For example, misconceptions exist about revocable living trusts. When keeping the farm in the family, ensure that you know how this trusts works and whether you need one.
Keeping The Farm Safe
When having a large and important asset like a family farm, one may need safeguards in place to protect against civil suits and creditors. The revocable living trust is an estate planning tool not an asset protection tool. To protect the farm from creditors and civil judgments, look into liability insurance.
Another idea: Depending on where you live, spouses could become “tenants by entirety” so that anyone seeking money from only one party cannot take a farm that belongs to both parties.
Using A Trust
A revocable trust does not give you tax benefits or property protection, but this trust can help your heirs. Items in trusts do not go through the probate process, which can be costly and time-consuming. This trust offers a more direct way for a farm to transfer to a member of the family. If one has assets that this member of the family does not, a trust could also be established to help pay for farm expenses.
You have options when keeping the farm in your family. Contact us so that we can help you develop a plan that works best for you and your loved ones.
