Will the Farm Stay in the Family?
Farms are abundant in New Jersey, in part thanks to the hard work and hand-shakes of generations who lived before in simpler times. Unfortunately, the days of “hand-shake” deals are behind us. Charming, historic agricultural buildings are costly to maintain. Siblings spread out and relocate, resulting in fewer “next generation farmers.” Assets are largely tied up in land and equipment. And commercial activities on farms are regulated. Farmers may sell their development rights to reduce taxes and obtain cash. Even with reduced taxes and cash, farmers need both a business plan for generating adequate income and a succession plan for transfer of the farm upon retirement and/or death.
Estate, business, financial, and land planning each play a role in proper business and succession planning. The State of New Jersey, State Agricultural Development Committee, maintains an online library of information on the topics of Farm Transfer, Succession, and Retirement Planning. The issues raised and questions to ask can be overwhelming. And, it is important that financial and legal decisions are customized to each families’ specific priorities, concerns, and realities. Attempting to keep a farm in the family may be driven by certain factors which, without a plan, will result in a forced sale of the farm. And, the long-term needs of the land owners and their family may shift over time, requiring an understanding of how an existing estate may be compromised.
Similarly, business and land planning are an important factor in keeping the farm profitable for both present and future generations. Ideally, these factors will be considered when preserving farms. Public markets and events, agri-tourism, and traditional farming each co-exist throughout New Jersey, subject to Right to Farm limitations, possible Highlands restrictions, environmental and building codes, and more. Business best practices should be followed as well, including limiting liability, adequate insurance, and compliance with lender and insurance requirements. Farming is now occurring in a more complex legal environment.
Invest in the Future of the Farm
The attorneys at Shanahan & Voigt, LLC partner to provide comprehensive services to farmers. Attorney Nicole Voigt advises on agribusiness, land transactions, leases versus licenses, preservation, zoning, Right to Farm, asset buy/sell, due diligence, property disputes, and similar issues affecting farmers. Bob Shanahan advises on estate planning, business succession, trusts, Medicaid planning, and elder issues. Nicole and Bob work together to provide holistic advising to our clients, and are proud of the many families we have served. Contact us to discuss your agricultural planning needs.