One of the most important things to ensure a smooth transition for your family farm is creating an Estate Plan that works. Possibly one of the most frightening issues facing a farming family could very well be that when both parents die, the children may be faced with dividing land and have difficulty in providing necessary liquidity for claims and Estate Taxes.

Typically, Farm Families will want to set up a Revocable Living Trust to direct the transfer of the land and operation to the next generation. Special issues must be addressed if one or more children want to continue the business and there is a need to treat other children fairly. It may be wise to form a Family Limited Partnership, or FLP. An FLP is an effective and efficient way to transfer land and property to children and other heirs. This is an advanced technique that does require the client to do some minimal on-going work like filing annual reports, getting annual appraisals and the like, but it can be extremely effective and beneficial to the family that chooses to implement this strategy.

The great benefit of the FLP is that as in other limited partnerships, there is a general partner and limited partners. The general partner maintains the control of the entity while the limited partners have only a minority interest. The general partner can gift shares of the LP to the children who receive a discount on the value of the transfer due to their minority interest and lack of control.

Our firm has created estate plans individually tailored to the needs of Kansas farm families for over 25 years. We understand your concerns and needs. If you have any questions or concerns about your farm or ranch planning, do not hesitate to contact us. Our experience working with farm families and our individualized approach sets us apart from other firms.