Can You Keep Your Farm in Your Family Forever?
A lot of farmers I talk to have the same dream. They want their farm to stay in the family. That old red barn, the fields worked for generations, passed down to children, grandchildren, and maybe even great-grandchildren. It is a beautiful goal, but the truth is there is no legal way to make it happen forever. Anyone who tells you otherwise probably does not fully understand their own plan.
Revocable Trusts and LLCs: Keeping Things Smooth
One of the best ways to pass a farm along is through a revocable trust combined with an LLC.
A revocable trust keeps the property under your control while you are alive and makes passing it down smoother after you are gone. It also avoids probate, so your family does not get tied up in court.
An LLC can gather family members under one roof when it comes to ownership, protect you from liability, and make decision-making easier.
These tools also prevent outsiders from taking advantage during difficult times. When a farmer passes, you do not want developers circling around a probate estate. A trust and LLC give your family some protection and breathing room during a hard season.
It is important to understand that these tools do not guarantee the farm will stay in the family forever. They make things easier and help protect the farm during transitions, but they cannot lock it in permanently.
Conservation Easements: Limiting Development, Not Sales
Conservation easements can be useful for keeping the land from being subdivided or developed. They do not stop a sale. Your heirs could still sell the farm if they choose. Easements help preserve the land itself, but they do not guarantee it stays in the family.
Irrevocable Trusts: A Trade-Off
Some landowners consider irrevocable trusts. These transfer ownership and limit your ability to sell the property during your lifetime. They can provide certain tax benefits or asset protection, but there are serious trade-offs:
You lose direct control over the property. In practical terms, this means you cannot sell the farm, even if you face a financial emergency, medical crisis, or other urgent need. Getting out of an irrevocable trust usually requires expensive legal maneuvering and court approval.
No step-up in basis for capital gains. When the property passes to your heirs, they inherit your original purchase price, not the current market value. This can create significant capital gains tax liability if your children sell the property after you pass away.
There is no trust that can be made to last forever. Eventually, the property moves according to the trust’s rules.
The Human Factor: Make Sure Your Family is On Board
The most important factor no legal document can fix is whether your heirs want the farm. Even the best trusts, LLCs, or easements will not matter if the next generation is not committed to farming. Sit down with them, talk it through, and make sure everyone shares the vision. That is the real key to keeping a farm in the family.
Takeaways
There is no way to keep a farm in the family forever.
Revocable trusts and LLCs help things run smoothly and protect against outsiders.
Conservation easements prevent development but do not prevent sale.
Irrevocable trusts restrict control and have tax considerations but do not guarantee permanent family ownership.
Most importantly, make sure your family is on board.
Need Help Figuring It Out?
If you want someone to walk you through your options and help your farm stay in the family as long as possible, check out my social media pages for more tips and advice. I hope this gives you a better sense of who I am and the work I do, and that you will feel confident sending me a message on my website so we can figure out the best plan for your farm and your family.