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NC State Extension

Farm Succession and Transfer

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This page will feature articles, resources, presentations, templates and links to support decisions related to organizing and transferring farm assets for continued productive use. Topic key words include: Land and Farm Business Succession, Leases and Options, Business Entities, Estate Planning (wills, trusts, powers of attorney, etc.), Trustee and other fiduciary powers, leases, purchase contracts, tenancy in common agreements, option agreements, beginning farmers. 

This portal’s particular focus is “farm business succession,” the development of strategies and tactics to transfer working assets (e.g. supporting a business concern) so as to minimize any disruption in the income streams from (and costs of managing) such working assets. Farm succession (also popularly called “farm transition”) will include business entities (e.g. limited liability company), titling of assets, contracts, leases, business valuation, use of life insurance, and communication.

Please check out this GLOSSARY OF TERMS (republished from the workbook Planning the Future of  Your Farm)

ESTATE PLANNING and ADMINISTRATION

Estate Planning – as the term is used in the context of farm succession –describes the suite of documents drafted, reviewed and executed that plan for the disposition of assets (heirlooms, farmland, business interests, etc.) while alive by gift and at death by will or trust. The term also concerns plans for ensuring clear instructions for disposition of remains and other wishes to be carried out by descendants and others. Key words: will, trust, intestate succession, power of attorney, health care power of attorney, living will, advance medical directive, fiduciary duty, letter of last instruction, gift

LEASES and FARM TENURE

A lease is a written agreement for a defined term for the use of another’s land or certain personal property (i.e. machinery). This page contains narratives, presentations and templates related to drafting of written agreements for use of land in farming. The emphasis of this page is on various types of lease templates for use of land, as well as rights of farm tenants and lessees, and their landlords. Agreements for transfer of ownership appear under Asset Transfer Agreements. Key words: lease, tenant, lien, emblements, term, rent, crop share

ASSET TRANSFER AGREEMENTS

Asset transfer agreements are written agreements for the transfer of land and business assets, including option agreements and contracts for seller financing of purchases. This page contains a number of templates and language suggestionsKey words: option agreement, buy-sell agreement, equipment lease, right of first refusal, amortization, finance, deed of trust, UCC

PRESENTATIONS

Succeeding in Succession Leadership and Legal Decision-Making. This presentation by David Mayo of East Carolina University and Andrew Branan of NC State University places successor leadership development alongside the spectrum of legal decisions made over a course of decades regarding farm succession.

WORKBOOKS

New! So You Inherited a Farm

This new publication – funded by the NC Tobacco Trust Fund Commission – presents topics and templates concerning the transfer and management of farm interests. Topics include wills, trusts, gifting, titling of property, option agreements, LLC operating agreements, a tenancy-in-common model agreement, and narratives on farm tenancy, farm leases, conservation agreements, and property taxes. A pdf can be downloaded here. Much of the contents can be found by searching the farmlaw site.

Planning the Future of Your Farm

This comprehensive workbook – first published in 2006 and updated in 2018 – contains useful narratives and worksheets to assist with developing your estate planning and business succession documents. The PDF of the workbook can be dowloaded here. An accompanying presentation can be downloaded here.

Getting Into Farming

This workbook is a basic introduction to aspiring farmers on pursuing their farming aspirations. It includes worksheets and narratives on budgeting, planning, record-keeping, seeking land for lease or purchase, setting up a business entity, etc. It was produced by Andrew Branan and others affiliated with National Center for Appropriate Technology under a Beginning Farmer and Rancher Development Program Grant. The workbook can be downloaded here.

Acknowledgements

Content loaded to Agricultural and Natural Resource Law portal, including narratives, workbooks and presentations, is supported by The North Carolina Tobacco Trust Fund Commission (TTFC) (Grant award 2019-001-16), titled “An Heirs Guide to Farmland”).