The Legal Architecture Andrew Branan Lawyer The Branan Law Firm PLLC wwwbrananlawcom andrewbrananlawcom This Lawyers Observations Try not to give your heirs undivided interests in land ID: 627633
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Planning the Future of Your FarmThe Legal Architecture
Andrew BrananLawyerThe Branan Law Firm, PLLCwww.brananlaw.comandrew@brananlaw.comSlide2
This Lawyer’s Observations
Try not to give your heirs undivided interests in landForget about the Estate Tax, focus on management, equal distribution, and optionsIf you have a likely “farm successor”, use life insurance if you can get itThere must be an exit vehicle (and a controlled ‘deal’) for title
Legal Architecture is about controlling title in land and working assets
“Pages and Toner” vs. Old Time SimplicitySlide3
You can’t make it perfect, so make it flexibleSlide4
No Strings AttachedGive property away
Carryover basisLife EstateSell property for liquidityDistribute property to heirs by willShare and share alikeSpecific distributionsSlide5Slide6
Strings AttachedTransfer property to a Trust
During lifeAt your deathTransfer property to a “Business Entity” (ie. Limited Liability Company)Contract governsCannot “paper over” humansSlide7
Wills with Testamentary Trusts (simultaneous death)Slide8Slide9
Trust ArchitectureConsolidate personal property farm assets into entity or to “farming heir”Specific property distributions (“Equal”)More info the better: PIN, Deed Book & Page
Make it easier for the next lawyerOptions to Capture Title (“Fair and Equal”)Options in favor of “farming heir” generallyOptions in favorSlide10
Working Asset Management
Operation LLCPartners contribute their ownership interest in cattle, bins, machinery, etc.ownership becomes their contribution and thus % of ownershipLand LLCSibling owners transfer interest to the LLCChildren become members, equitable distributionSlide11Slide12
The Operating AgreementA Contract between contributors of assetsDictates who can be membersMember vs. AssigneeDictates voting requirements for decisions
Level one: manager on his/her ownLevel two: member vote of 2/3 (3/4) etc.Dictates triggers for company purchase of interestsAppraisal procedurePrice and payment terms (seller finance option)Slide13
LLC Set-Up TasksSketch plan based on circumstances, get accountant sign-offForm entity with Secretary of StateGet EIN (tax ID)
Open bank accountsElect S form 2553?Share operating agreement with Lender (Farm Credit)Re-title over-road equipment with DMVUpdate Contracts (or record DBA’s)For Land, update PUV within 60 daysSlide14Slide15
www.brananfarmlaw.com
The Branan Law Firm, PLLCAndrew BrananHeather S. Kennealy
The Branan Law Firm, PLLC
919 245 8521
andrew@brananlaw.com
hskennealy@brananlaw.com
Practice Service Area
: North Carolina and Virginia
Client Focus
: Farm Operations, Large Acreage Owners, “Legacy Land Preservation”, “Heir Property Solution”
Continuing Legal Education
(CLE)
: Estate Planning, Farm Taxation, Elder Care and Special Needs, Agriculture Topics (when I can find them!)