New York Estate Planning & Elder Law Blog
PASSING THE FARM IS LIKE PASSING ON THE FAMILY CORPORATION
There is no doubt that some modern farmers run large multi-million dollar operations right in their backyard. Maintaining a herd of cows and other grazing stock costs potentially millions to buy or lease (or both) land for the animals to grow on. In addition, the processing equipment for milking cows, labor costs, insurance, veterinarian costs and any number of other costs can run into the millions each year. While most farmers are far from millionaires, most work much harder than many millionaires. Indeed there is more to farming than the land, buildings, equipment, animal stock or orchards and other tangible objects. Tending to corn fields, wheat, soy, orchards, vineyards, sod, tree farms, et cetera are all specific skill sets that require years of training and no small measure of technological investment. The same can be said of a family run saw mill or similar type of business. There is something unique about farmers, however.
Many families are tied to the land. John Mellencamp who was raised in farm country and one of the original founders of Farm Aid wrote about the life of the average farmer, growing up on the same farm that his own daddy did on land cleared by his grandpa, walking along the fence while holding his grandfather’s hand and of being tied to land that fed a nation and made him proud. It is this tie to the land, unique education and training that can start literally while the child is in diapers as well as the emotional bond with families that makes farmers different than most other family run small businesses. There are also unique legal protections found throughout the law for the benefit of family farmer. For all of these reasons transferring a family farm from one generation to the next requires special planning.