We would like to thank our neighbors in Kenton County, Kentucky for visiting our website. If you are looking for a licensed estate planning attorney in Kenton County, you have found a reliable local resource. With a population of more than 159,000, Kenton County was named for pioneer Simon Kenton, a notable frontiersman and has been home to world-renowned artists and politicians.
Kentucky Horse History
Kentucky certainly has a long legacy of horse breeding and racing, as a result of the pioneer settlers from Virginia and Maryland traveling west. Now, the Bluegrass Region has become the premiere region in the horse industry. The climate of Kentucky is nearly perfect for breeding, raising and training livestock, especially horses, which tend to thrive in such moderate climates. Also, the changing seasons promote healthier animals.
Kenton County geography makes for great race horses
Also, the geographic makeup of Kentucky has historically produced premiere horses and race tracks, with its rolling hills of terrain and turf of rich limestone stratum. Limestone stratum is known to result in especially nutritious grasses and fresh water, and in turn, is believed to result in strong bones, sturdy ligaments, and the healthy cardiovascular systems of Kentucky’s horses.
What is the Purpose of Farm Planning?
An estate plan is a framework for the disposition of your assets at the time of your death. For farmers or ranchers, having an appropriate estate plan can serve an even bigger purpose. When you pass on, it is crucial that a plan is put in place for a smooth transition of your farm or ranch, in terms of ownership and management. Planning ahead can provide security for your family, even those who are not actively involved in the farm. The purpose of farm planning is complex and very important to the survival of that legacy.
Why is a farm estate plan so important?
It has been predicted that one-fourth of the nation’s agricultural land will likely change hands in the next decade. When that happens, these valuable lands are vulnerable to being converted to other uses. Estate planning is important to our nation, as it ensures that productive farms and ranches remain available for agriculture. Farm estate planning is also important for those families who have every desire that their families stay in the farming industry and maintain the legacy that has been established.
Primary goals of a farm estate plan
A good estate plan for farms or ranches should accomplish at least the following four goals:
- Transfer ownership and management of the farm, land and other assets to a new operator;
- Avoid unnecessary transfer taxes, such as income, gift and estate tax;
- Ensure financial security and peace of mind for generations; and
- Cultivate the next generation’s management capabilities.
Although a will is an important part of any estate plan, a will alone cannot guarantee the secure future of your family farm.
Useful transfer and tax reduction strategies
There are various ways to plan for the transfer of assets and management of a family farm, while reducing taxes whenever possible. Annual gifts can be used to transfer the business, while reducing transfer taxes by taking advantage of the annual gift tax exclusion. Also, gradually transferring management responsibility for the farm, along with asset ownership, can help make the transition much smoother from one generation to the next.
A buy/sell, or buyout agreement, protects farm owners when a co-owner leaves the business. If a co-owner wants out of the business, wants to retire, wants to sell his or her shares to someone else, gets divorced, or passes away, a buy/sell agreement protects everyone’s interests by setting the price and terms for a buyout. Buy/sell agreements can ensure that a farm business is transferred in an orderly manner. Life insurance is often used to fund buy/sell agreements and establish trusts.
Agricultural Conservation Easement
Another important tool to consider is an Agricultural Conservation Easement. This tool can provide permanent protection for farmland and prevent non-farm development. It can also significantly reduce transfer taxes where the market value of the land is much greater than its restricted value. An Agricultural Conservation Easement is actually a legally recorded deed restriction that prohibits practices which would damage or interfere with the agricultural use of the land. Because the easement is a restriction on the deed of the property, the easement remains in effect even when the land changes ownership.
If you have questions regarding farm planning or any other business planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (606) 324-5516 (Ashland, KY), (859) 372-6655 (Florence, KY), or for individuals in North Carolina (704) 944-3245. We are here to help!