Structuring the farm operation properly is one of the most important things any farmer can do. You want to know why? Think about this.
What happens if the tractor hits a school bus? What name or entity is the equipment owned by? Who will get sued? Can they get to the personal assets? What if something happens to you, will your family know what to do?
You should be able to answer these questions. There are many options available for structuring for liability/insurance issues, but also estate planning and Farm Bill items as well. I can’t recommend the best options for everyone as all situations and operations are different. Farm accident liability issues can cost huge amounts of money and can completely end a successful operation with one unfortunate incident. I can say this….RUN do not walk to an attorney and CPA to get the process going to get all issues addressed sooner rather than later!
Don’t leave family members confused
The other subject that goes hand in hand with properly structuring your business is estate planning, or farm transition planning. You don’t want to leave your family members confused during such a terrible time. People (not just farmers ALL people) seem to put off estate planning and creating a will – I guess people think if they do that they will end up dying soon? This is not something to be ignored especially if you have a large operation that may bring a tax liability and you have multiple heirs. It is important no matter what the size of the operation is, and it can get very complicated and messy. You want to protect your operation and preserve it beyond your lifetime.
Everyone always puts items such as these off until something happens and then they think, “Dang I should have took care of that!” It is never too soon or too late to begin working on figuring out the best possible structure. It may be a LLC is needed or a General Partnership, you never know until explore the options with professionals. Don’t just Google it either, go talk to someone who specializes in correctly organizing farms. Estate planning is the same way, it is never to early to begin thinking about the future of your operation beyond your time. Look for much more information on this subject from Agri Authority in the future. I may end up sounding like I am drilling the same thing over and over, but when it is as important as the items in this article it needs to be drilled! Now start running to your team of advisers for your operation and get the ball rolling!!
