If you are a Georgia farm owner, you likely have plans for how ownership of your farm will transfer after your death. Estate planning involving family farms can be substantially changed by divorce. As a result, divorcing farmers should consider the following factors when negotiating how assets should transfer after a divorce.
Consider Passing on Ownership of the Farm through Wills
Just because a couple divorces does not mean that both parents end up no longer caring about the couple’s children. You still want what is best for your child or children. As a result, some farm families who divorce agree that both parents will pass on ownership of their portion of the farm in the terms of their Last Will and Testament. Besides wills, however, you might decide to place the farm in a trust whose ownership automatically transfers to your children following your death.
The Role of Prenuptial Agreements for Farm Families
One of the many complications that can arise if divorce parents remarry is that it can interfere with the transfer of assets to the couple’s children. If the parties choose to make sure that heirs receive assets, the parents should consider entering into a prenuptial agreement with any new spouses.
These agreements should include terms that waive the rights to the property, which will avoid lengthy and expensive legal battles later on about who owns the farm. Other times, it might be necessary to enter a buy-sell agreement with your former spouse. In these situations, the terms of the trust should be carefully reviewed.
Treat Things Like a Business
If you plan on passing on ownership of the farm to your children or other heirs, it is critical to stay on good terms with your former spouse. In situations where spouses can get along peacefully, couples can often continue to operate the farm together. By realizing that a divorce is really the end of one type of contract and that your relationship is now a business rather than a personal one, you can hopefully stay on light and positive terms with your former spouse.
Utilize a Life Agreement
Divorcing families have discovered that life insurance can be utilized in various ways. Not only can life insurance be used to make sure that child support and spousal maintenance are paid even if you tragically pass away, life insurance can also be used to fund buy-sell agreements in case the farmer owner passes away. Sometimes following the death of either parent, life insurance proceeds can also be used as security for various liabilities associated with the farm.
Speak with a Knowledge Family Law Attorney
Divorce has many unforeseen complications including impacting the terms of your estate plan. To better understand what effects divorce will likely have on the succession of your family farm, do not hesitate to speak with a knowledgeable attorney at Vayman & Teitelbaum, P.C. today.