When a Trust Complicates Farm Succession Planning

Keeping a farm in the family is rarely simple. It is not just about land or assets, but about legacy, relationships, and the responsibility of passing something meaningful to the next generation. Even with thoughtful planning, older estate documents can create challenges that were never anticipated, especially as circumstances change over time. 

One situation that comes up more often than many families expect involves testamentary trusts. These trusts are often created to protect assets and provide structure, but years later they can limit flexibility when plans need to evolve. 

When the Plan No Longer Fits the Reality 

Consider a situation we often see in farm succession planning. A farmer lost his wife more than a decade ago, and as part of her estate plan, her share of the farmland was placed into a trust. The trust specifies that, after his passing, her portion of the property will be divided equally among their four children. 

Since then, one of those children has stepped fully into the operation and built his future around farming. The father made a promise that he would find a way to keep the farm intact so his son could continue. The challenge is that the trust no longer reflects that goal, and it cannot be changed. 

This is where many families find themselves. The plan made sense at the time, but life moved forward in ways no one fully anticipated. 

Working With What You Can Control 

Even when part of the plan is fixed, there is often still room to adjust other pieces. In this situation, the father still controls his share of the property, which gives him the ability to influence how things unfold. 

He could choose to leave his portion of the home farm directly to the farming son. While that does not solve everything, it reduces the amount the son would need to purchase from his siblings. Another option is to balance things by allocating additional land from another parcel, helping create a more workable outcome for everyone involved. 

These adjustments may not be perfect, but they can move the family closer to the original intention. 

Looking at the Numbers Differently 

In some cases, the solution is not about changing the structure, but about adjusting how value is shared. 

If the trust requires full market value for its portion, the father may be able to offset that by offering more favorable terms on the assets he controls. A deeper discount on his share can help create a similar overall outcome to what the family originally envisioned. 

This approach requires careful planning, but it can help balance fairness across the family while still supporting the goal of keeping the farm intact. 

Having the Conversation Now, Not Later 

In many situations, the most important step is simply having an open conversation. 

If the goal is to keep the farm operating, it helps to bring the family together and talk through what that means in practical terms. Would the other children be open to allowing their sibling to purchase the land over time? Do they share the same long-term vision for the farm? 

These discussions are not always easy, but they are far easier to have now than during a time of loss. When expectations are clear, families are better positioned to move forward together. 

Setting Expectations With Care 

One of the more difficult moments for any family is when a will is read and something feels unexpected. Without context, decisions can feel unfair, even when they were made with good intentions. 

Taking the time to explain the reasoning behind the plan can make a meaningful difference. When family members understand the limitations created by the trust and the goal of preserving the farm, they are more likely to see the full picture. 

Planning With the Future in Mind 

Situations like this are a reminder that estate plans should not remain static. Over time, land values change, tax rules shift, and family roles evolve. What worked years ago may not support the same outcome today. 

Revisiting these plans periodically gives families the opportunity to adjust while options are still available. It also creates space to think through both the financial and personal aspects of succession. 

At its core, farm succession is about more than transferring property. It is about creating a path forward for the next generation while maintaining fairness across the family. With thoughtful planning and clear communication, it is possible to move closer to both. 

At DBC, we work with agricultural businesses and families to bring structure and clarity to these conversations. By focusing on long-term goals and practical realities, we help guide decisions that support both the operation and the people behind it. 

To read the full article by Mark McLaughlin visit https://www.agriculture.com/how-to-keep-the-farm-in-the-family-when-a-trust-gets-in-the-way-11825875