In many parts of Oklahoma, landowners must answer questions about how agricultural land must pass to loved ones after the owner’s death or incapacity. Questions about how estates can be passed on and what parties who do not inherit ownership of land will receive are common in such cases. Understandably, many Oklahoma agriculture and farm owners discover that it is more difficult to decide how to transfer this property than it is other types of land.
Emotional Connection to Land
For the owners of non-agricultural land, the transfer of property at the end of life is generally a non-emotional process. Most agricultural landowners, however, have a deep connection to the land. Many of these owners recall the process of having to buy out siblings as well as the earlier generation. As a result, while decisions can often be made more quickly and unemotionally for other landowners, this just is not so for the majority of farm owners.
Operation Versus Land Uses
When a person refers to a “farm,” this often includes both the operation of the land as well as the underlying land. Transferring a farm is unique because often the land is transferred differently than the operation. For example, the oldest child might inherit the operation, while the rest of the children might receive an interest in the land. Consequently, creating a successful estate plan for a farm is often more difficult than if only a piece of land were involved.
Deeds are Often Difficult to Locate
Farm owners often have a difficult time locating the document that establishes they are owners of the land. Other times, farmers have documents with outdated land measurements that they rely on to establish ownership. Many times, to successfully pass on a farm, the property owner must retitle land, which means that a copy of the last deed of record and any exceptions must be obtained. While these challenges can occur with other types of property, it is less common.
Ownership v. Rental Issues
Many farms and agricultural land ownership operate much more land than strictly what they own. The United States Department of Agriculture even reports that approximately 39% of the 911 million acres of farmland in the contiguous 48 States were rented. As a result, the best farm succession plans address assets that clients might not own but need to access. These situations often require parties to work with landlords to secure first refusal rights as well as other issues involved with renting,
The Disclosure of Personal Details
Farmers cautiously guard many personal details including the value of their property and what they own. Consequently, many agricultural property and farm owners prepare personal statements that do not fully disclose all of the necessary details. Consequently, additional efforts must be taken to make sure that critical details about a person’s assets are fully disclosed.
Speak With an Estate Planning Attorney
Deciding how to pass on a farm presents many challenging questions. In most cases, the answer that a person settles depends on what will be influenced by what will cause the least harm and discomfort to their loved ones. If you need the assistance of an experienced estate planning attorney, do not hesitate to contact attorney Jim A Lyon today.