Gaughan & Connealy provides comprehensive legal representation to owners of farms and to owners of family businesses throughout Kansas City, Missouri and throughout Overland Park, Kansas. Business and farm owners have important assets that can be left as a legacy for generations to come. However, there is a substantial risk of loss of farm or business assets, especially towards the end of life or after death. Steps can be taken to safeguard the family farm and business property, if you have a knowledgeable legal advocate to provide advice.
To learn about your options for family-owned businesses and farms, you should contact our legal team today. We can provide advice on a personalized plan custom tailored to your family’s farm or your company, and we can also answer some of the key questions you may have including:
- What are the risks faced by owners of family businesses or farms?
- How can I mitigate against risk and protect my farm or business assets?
- How can a Kansas or Missouri lawyer help?
What are the Risks Faced by Owners of Farms and Family Businesses?
Owners of family farms and family business are at risk because they have a substantial asset. This asset makes business and farm owners vulnerable to being sued, or to creditor claims if creditors try to come after assets. It means that if the business or farm owner has to go into a nursing home, the asset could prevent him from qualifying for Medicaid to pay for the nursing home care. It also means that the farm or family business could push the owner’s estate over the excludable threshold for estate taxes, which is $5.45 million as of 2016.
Business and farm owners need to understand the unique risks that are inherent in owning substantial assets and should take steps to address the issues that could affect the legacy that the farm or business could become.
How Can You Protect Farm or Business Assets?
To protect farm and business assets, you should consult with an asset protection lawyer who can evaluate the risks that you face and who can help you to put together a comprehensive plan using all the legal tools available to you. Some of the different ways that you may protect your company and farm could include:
- Incorporating the business. When you incorporate a company, the company becomes an entirely separate legal entity from you. You have separation from the business so your personal assets are not put at risk if someone sues the company.
- Creating a business succession plan. If you become disabled, die, or simply want to walk away from the business, you need to know who is going to take over management of the company and how to facilitate its transfer. A business succession plan allows you to define who will take control and what the transition process will involve. If there are co-owners of the company, they also need to be on board with the business succession plan. You may wish to create a buy/sell agreement with your co-owners so you are all protected in case anyone leaves.
- Using trusts to protect company assets or farmland. You may be able to create a trust and transfer ownership of your farm or your business shares to the trust. Depending upon what type of trust that you choose, this option could help you to prevent the assets from counting when you try to qualify for Medicaid and could also help to keep the assets safe from creditors. Trust creation also allows you to ensure property or business assets are managed appropriately in the event that you become incapacitated, and can make it possible for assets to transfer outside of probate. It may even be possible to reduce or avoid estate taxes when you create the right type of trust.
- Creating an incapacity plan: A living trust or power of attorney makes it possible for you to ensure you get to choose who will manage your farm or your company if you cannot.
These are just some of the different things that you may wish to do in order to protect your farm or business. You need a plan that is personalized to meet your needs and an attorney can help.
How Can a Kansas or Missouri Lawyer Help You?
Gaughan & Connealy can offer comprehensive advice to farm and business owners on protecting their company or land and preserving their legacy. Give us a call today to schedule a consultation and learn how we can assist you.