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Why estate planning early is crucial for Kentucky farmers

On Behalf of | Mar 13, 2024 | Estate Planning |

Kentucky farmers make their living off of the land. Some people become farmers, but many people grow up as farmers. Their parents or grandparents work the land, and they acquire that property from their family members to continue that tradition. Oftentimes, generation after generation may add to the family’s farm holdings. In some cases, successful Kentucky farmers may have thousands of acres of property that produce crops or provide grazing space for livestock.

Ideally, most adults in any personal circumstance would engage in proactive estate planning. However, many people do not create estate plans until they have health issues, a family tragedy or retirement concerns. Farmers are some of the people who might benefit the most from estate planning as soon as possible for the protection of their agricultural properties.

Farmland is valuable and therefore at risk

The acreage that comprises a Kentucky farm is a very valuable resource. There are numerous scenarios in which someone’s agricultural holdings could be vulnerable. Many farmers finance their equipment and any expansions to their farms. If they fall behind on payments, they could face lawsuits or foreclosure attempts that could put their property at risk.

Other times, far more banal issues, including divorce, are what endanger farmland. Someone’s spouse could lay claim to the farmland someone inherited or purchased from their parents. Many farmers are only a few bad seasons or a single bad relationship away from losing their livelihood and their family legacy.

Therefore, estate planning as soon as someone realizes their vulnerability could be a smart move. Many farmers specifically choose to hold their agricultural property in a trust. Doing so achieves several goals. It can protect the farmland in the event of a future divorce. It can shield property from creditor claims. Trusts can even prevent the possibility of family members deciding to sell the farmland for money instead of allowing the next generation to take possession of the property and work the land.

Given that farmland is very valuable both emotionally and financially, those involved in agricultural endeavors may need to explore how their holdings could be vulnerable to protect their most valuable resources from potential legal challenges in the future.

Creating a trust can be a smart move for someone who feels strongly about the preservation of their agricultural holdings. Kentucky farmers who take the time to create trusts and thorough estate plans can feel more confident about the legacy they hope to leave when they die and the protection of the property that allows them to support their families.