CEDAR FALLS, Iowa (RFD NEWS) — Farm and ranch families can spend generations building land and equity, only to see that wealth divided or depleted after an inheritance. Lloyd Financial Group chief executive Luke Lloyd says a spendthrift trust can place guardrails around distributions while helping family assets support heirs over time.
Instead of transferring an inheritance outright, the trust places assets under a trustee who follows written instructions. Payments can be scheduled for education, health care, housing, business needs, or regular income.
For agricultural families, the structure may help keep land, livestock, equipment, mineral interests, or ownership from being sold quickly. It can also reduce pressure when heirs have different financial skills, debts, or goals.
Assets remaining inside a properly drafted trust may receive some protection from creditors, lawsuits, or divorce claims, depending on state law. The arrangement does not provide absolute protection and should not be used to hide income or avoid taxes.
Families should coordinate the trust with a succession plan covering management, ownership, liquidity, taxes, and sibling expectations. Attorneys, tax professionals, and financial advisers should work together before documents are finalized.
More Farmland Real Estate Strategies
As the second half of the year gets underway, many farmers and landowners are beginning to evaluate their leasing strategies and prepare for fall lease negotiations.
Accredited Farm Manager Chad Hertz with the American Society of Farm Managers and Rural Appraisers (ASFMRA) joined us on Wednesday’s Market Day Report to discuss key considerations for farmland owners as they prepare for the upcoming leasing season.
In his interview with RFD News, Hertz discussed what farmland owners should be thinking about as they position themselves for successful lease negotiations and the importance of having a clear leasing strategy before discussions begin.
He also addressed some of the common mistakes farmland owners make when developing a leasing strategy and highlighted areas they should avoid as they look ahead to next year.
The conversation also focused on current challenges facing agriculture, including pressure on commodity prices and farm profitability. Hertz discussed how landowners can balance the goal of maximizing rental income while maintaining strong relationships with their tenants during a challenging farm economy.
LEARN MORE: www.asfmra.org
