For many Arkansas families, farming or ranching is more than just an occupation—it’s a way of life that has been passed down from generation to generation. While farmers and ranchers still need to consider the basic planning elements all families need, there are some additional issues that must be addressed to ensure their legacy won’t be cut short.
Handling Liquidity Issues
Agricultural land and equipment are illiquid, but estate taxes will need to be paid within nine months of death. Additionally, your heirs will still need to cover all the day-to-day expenses associated with running the farm or ranch.
Securing disability insurance, long-term care insurance, and life insurance, as well as the appropriate lines of credit, is an essential part of estate planning for a family farm or ranch. Without these precautionary measures, your heirs could be forced to sell land or equipment at a reduced rate to accommodate their immediate short-term cash needs. Being “land rich and cash poor” is a problem to avoid at all costs.
Reducing Tax Liability
When you’ve spent a lifetime tending to your farm or ranch, it’s upsetting to consider the possibility of your legacy being gobbled up by taxes. However, since the taxable value of land and equipment is often substantial, your heirs could face a large tax burden if you don’t plan ahead.
Deeding on your needs and family situation, Quraishi Law Firm & Wealth Management can recommend strategies such as making yearly gifts to family members, creating a trust, or planning for charitable donations to minimize your total tax liability. We’re committed to ensuring you don’t pay a penny more than what is necessary.
Preserving Farm Program Payments
Often, farm program payments can be the difference between turning a profit and putting your entire operation at risk. It is essential that you work with an estate planning attorney familiar with agricultural law to avoid jeopardizing these valuable benefits.
At Quraishi Law Firm & Wealth Management, our team will create a personalized estate plan that is coordinated with the necessary structures to maximize the US Department of Agriculture farm program payments and other benefits from the Farm Service Agency and the NRCS. We urge our clients to address this issue proactively, since relying on joint accounts or beneficiary designations may result in subsidies being left on the table.
Passing Land to the Next Generation
When land is divided to be equally distributed, its potential is often wasted. To grow the value of your asset over generations, your farm needs to be aggregated and managed. Quraishi Law Firm & Wealth Management can help you investigate options such as forming a corporate farm and distributing stock to your heirs that will allow you to provide financial security for your loved ones while still leaving the farm as a singular entity. Many of these strategies can also provide protection from claims associated with divorce, bankruptcy, or frivolous lawsuits.
Dealing With Heirs Who Aren’t Involved in Agriculture
It is common for owners of a family farm or ranch to want to pass the family business to the next generation. However, it’s possible that not all of your children will choose a career in agriculture.
A proactive approach to estate planning can help you leave an inheritance that is fair to family members who are actively involved in the daily operation of the farm or ranch, as well as those who’ve chosen to pursue a different path. The Quraishi Law Firm & Wealth Management team will help you balance the unique needs of everyone involved as you create a farm or ranch succession plan.
Let Us Help You Plan for a Lasting Legacy
The many variables to consider in creating your estate plan may seem overwhelming, but you don’t have to go through this process alone. Quraishi Law Firm & Wealth Management is well-equipped to meet your needs by providing proactive tax planning, wealth management, estate and asset protection planning, and business planning legal services in one convenient location. We’ll take the time to answer your questions and learn about your goals for the future before providing the down-to-earth advice you need to protect your family or ranch for the next generation.
Our estate planning attorneys are available at our Jonesboro and Little Rock office locations to serve clients throughout Northeast and Central Arkansas. We are also available to meet with clients in our Memphis, Tennessee office, so don’t hesitate to contact us to set an appointment to discuss how we can best be of service.