Put farm succession promises in writingPut farm succession promises in writing

The holidays are a special time full of family, food and conversation. For farming families, those conversations often lead to a discussion on the future of the farm and its succession to the next generation. 

For the plan discussed at Christmas dinner to become reality, it must be put in writing through legal documents. Unfortunately, many of those conversations remain just that: verbal promises. 

Sometimes attorneys are asked to settle a farmer’s estate. Time and time again, those attorneys must break the bad news to farming heirs that verbal inheritance promises from Dad and Mom are not legally enforceable. 

For example: “You will inherit this farm after I’m gone, so don’t ask me to pay you anything right now.” Sorry, that is not what the trust says.

Or: “You will receive all of the land after I’m gone, and your siblings will only get the life insurance.”  Sorry, but everything, including the land, is designated to pass equally.

Or: “You can buy out your siblings at a discount after I’m gone, so don’t worry about putting aside very much money.” Sorry, that is not what the LLC operating agreement (if any) says.

The reason verbal promises are not enforceable is because the person who made the promise is no longer available to testify as to what was said. We only have a “he said, she said” issue with no way to verify the statement. 

Our legal system considers written evidence more persuasive than hearsay testimony, and there are many instances where hearsay testimony is not allowed to even be considered.

Legal documents secure promises

The situations above can be avoided by having open conversations about the future of the farm and making sure that the verbal promises are put in writing through legal documents. 

Legal documents could take the form of a will, trust, lease, LLC operating agreement, corporate buy-sell agreement, right of first refusal and many more. An attorney can help you select which documents are best suited to your family’s needs.

The fact that it takes a lawyer to explain long documents full of unfamiliar terms can be frustrating. But that is why it is so important to get to know your attorney, and make sure you have an attorney who takes the time to explain what is written in the document to you. That legal professional is responsible for matching your goals with the plan documents.

Once you have an attorney you can trust to explain the legal strategies and documents, you can rest assured the verbal promises you made to heirs or received from family are in order.

Bachelor is an attorney with Wright and Moore Law based in Delaware, Ohio. Contact him at [email protected] or 740-990-0750, or visit ohiofarmlaw.com.