Family Farms in North Carolina: Estate Planning and Business Succession Planning
Agriculture is one of the most important industries in North Carolina. According to the most recent data published by the United States Department of Agriculture (USDA), there are more than 52,000 farms operating in North Carolina. The overwhelming majority of those farms—85%—are classified as family farms and/or individual operations. While times have changed, many farms are still small operations. Nearly two-thirds of farms in North Carolina are smaller than 100 acres.
If you and your family own and operate a farm in North Carolina, you face some unique estate planning considerations. It is essential that you put the proper legal structure in place to protect yourself, your family, your business, and the future of your farm. In this post, our North Carolina estate planning lawyers provide an overview of estate planning and business succession planning for family farm owners.A Comprehensive Estate Plan is a Must for a Family Farm Owner
If you own and operate a family farm in North Carolina, it is imperative that you have a comprehensive estate plan that protects yourself, your loved ones, and your business. Estate planning is fundamentally about protection and security—no matter what unexpected event tomorrow might bring. Farm owners are never too young (or too far away from retirement) to start the estate planning process. Some of key elements of an estate plan for a family farm owner may include:
- A will;
- Living will/advance health directives;
- Powers of attorney; and
How exactly your estate plan should be structured depends on your circumstances and your objectives. Many family farm owners have questions about financial issues and estate taxes. The size of your farm and the value of the property that you own will determine what type of estate planning strategy is best for you and your family. In some cases, a family farm owner may benefit from setting up a trust to limit their tax liability or other financial costs.A Minority of Family Farms Make it to the Next Generation—Too Many Farms Lack a Plan
Even though large corporations are increasingly dominating the agricultural sector of the American economy, the family farm still plays a vital role in food production and food security in the United States. Unfortunately, too many family farms are struggling. A recent study found that only one-third of family farms nationwide are expected to survive to the next generation. A survey conducted by the National Agricultural Statistics Service (NASS) highlights the problem:
- 70% of family farm owners expect to pass their business to the next generation;
- 23% of family farm owners have an active plan in place for the transfer for their farm.
If you want to keep your farm in your family, it is crucial that you consider farm transition planning. Too many family farms run into serious problems because they lack the strategy to transfer the business to the next generation.Family Farms: Do Not Overlook the Importance of Business Succession Planning
Family farm owners should not overlook the importance of business succession planning. A business succession plan is not merely for large corporations. Quite the contrary, it is a vital tool for small businesses in North Carolina. Also frequently called a ‘business retirement plan,’ a business succession plan is a comprehensive strategy that determines how exactly your company will transition when you leave it. Among other things, a family farm business succession plan should:
- Identify future leaders of the farm,
- Make sure that the next generation is trained and prepared; and
- Provide adequate financing to continue operations.
An effective business succession plan is one that is customized to suit the unique needs of the family farm in question. If you have any specific concerns about creating a plan for the future of your farm, contact a skilled North Carolina business succession planning attorney for immediate assistance. An estate planning lawyer who has experience representing business owners will help you put the right plan in place for you and your family farm.Call Our North Carolina Estate Planning Lawyers for Help
At Arnold & Smith, PLLC, our Charlotte estate planning attorneys are dedicated, reliable advocates for business owners. Our lawyers can help farm owners protect their rights and interests. If you have any questions about estate planning or business succession planning as a family farm owner, we are available to assist. Contact our firm now for a completely confidential initial consultation. We represent clients throughout North Carolina, including in Mecklenburg County, Stanly County, Gaston County, Union County, and Cabarrus County.