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Farm Succession Advising:
An Attorney Training Compendium

The purpose of this compendium is to provide experienced attorneys as well as those new to farm succession planning with solid legal background material and technical tools to use in assisting farmer clients to develop their succession plans. Attorneys play an indispensable role as part of farmers’ succession planning team. Farm succession planning has unique characteristics and challenges. Attorneys who include farm succession planning in their professional portfolio and who make a point of learning the particulars are highly sought after throughout New England.

Background 

Land For Good’s Land Access Project (LAP) is a comprehensive multi-state project to address the farmland access challenges for New England’s beginning farmers.  LAP Phase Two (LAP2, 2015-2018) was a collaborative effort among farm service providers from the six New England states, supported in part by funds from USDA’s Beginning Farmer and Rancher Development Program.

Among beginning (and other) farmers’ biggest challenges is accessing land, including land and farms in the hands of older farmers. Therefore, how those farmers transition their farms to the next generation (family or unrelated) is of utmost importance.

One objective of the LAP2 Task Force on Succession and Transfer Assistance was to expand our region’s professional capacity to deliver succession planning assistance. To this end, the Task Force organized a two-day training for farm service providers. “A Seminar on Generational Farm Transfer for Lawyers and other Farm Service Providers,” was held in May, 2017 in Manchester, NH.

The seminar drew over 60  attorneys, land trust staff, Extension personnel, consultants, field staff and financial advisors. The agenda included several sessions aimed specifically at new lawyers and law students interested in this practice area. The seminar also provided opportunities to foster mentoring relationships between new and more experienced legal practitioners.  

 

Table of Contents

Introduction

  Background and purpose
  How to use this compendium
  Farm succession planning: a team approach
  Additional resources
  Acknowledgements

I.  Business Planning for Farm Transfer

  A.  Introduction
  B.  The basics
  C.  Entity choice
  D.  General intake: attorney’s farm client questionnaire
  E.  Operating agreements: contents, drafting and maintenance
  F.  Special taxation issues
  G.  Other Resources

  Appendices

  1. Annotated Confidential Business Planning Questionnaire
  2. Annotated Operating Agreement
  3. Joint Venture Questionnaire
  4. Sample Joint Venture Agreement
  5. Lease Template
  6. Lease to Own Fact Sheet

II.  Estate Planning for Farm Transfer

Part 1:  Farm Estate Planning Basics

  A.  Introduction
  B.  The basics
  C.  Three basic estate planning documents
  D.  General intake
  E.  Non-farming heirs
  F.  Competence
  G.  Engagement letters, fee agreements and closing letters
  H.  Professional liability insurance
  I.  Other Resources

Appendices

  1. Sample Estate Planning Questionnaire
  2. Sample Simple Will
  3. Sample Durable Power of Attorney for the Farm Client

Part 2:  Estate and Gift Tax and Tax Basis Rules

  A.  Exemption / Tax Rates / Portability / Step-up in Basis
  B.  Marital Deduction
  C.  Credit Shelter Trusts
  D.  Gift Tax
  E.  Connecticut Estate Tax
  F.  Vermont Estate Tax
  G.  New Hampshire Estate Tax
  H.  Rhode Island Estate Tax
  I.  Maine Estate Tax
  J.  Massachusetts Estate Tax

  Appendices

  1. Sample Credit Shelter Trust / QTIP Trust
  2. Sample Disclaimer Trust

III.    Farmland Conservation and Farm Transfer

  A.  Introduction
  B.  Conservation easements 101
  C.  Land trust due diligence
  D.  Option to Purchase at Agricultural Value (OPAV)
  E.  Funding sources
  F.  Bargain sales, donations and bequests

  Appendices

  1.  Berthiaume Conservation Map
  2.  Berthiaume to Blodgett & VLT Case Study
  3.  Berthiaume to VLT PSA for Fee
  4.  Berthiaume to VLT PSA for Conservation Easement
  5.  Berthiaume Lease to Blodgett
  6.  VHCB Grant Conditions
  7.  Berthiaume Farmland Conservation Easement
  8.  Maine Farmland Trust Policy on Land Conservation
  9.  Greenacre Project Summary
  10.  Vermont Soils Classification
  11.  Berthiaume Soils Map  
  12.  Maine Farmland Trust Stewardship Fund Policy
  13.  Berthiaume Monitoring Report
  14.  Berthiaume ALE Plan

 IV.  Other Land Transfer Tools

  A.  Introduction
  B.  Land contracts for the transfer of farmland
  C.  Cooperative land ownership

  Appendices

  1. Chart:  Cooperative Legal Structure Comparison
  2. Lost Meadow Ground Lease
  3. Lost Meadow Bylaws
  4. Well Spring Land Cooperative Bylaws
  5. Lease-to-Own Fact Sheet