Ohio farmers sometimes face unique issues when it comes to asset transfer. It's not uncommon for a farmer to want to leave real property to a specific family member on death or even transfer an ownership interest during life. The legal options available allow for several variations of transfer timing and structure. Corporations and limited liability companies offer tremendous flexibility and may be beneficial as estate planning tools or to facilitate asset transfer.
When it comes to transferring ownership of farm property, a distinction must be made based on whether the property in question consists of operating assets or land assets. Generally speaking, corporations should be established only for a business purpose; they are not ideal if asset transfer is the only goal. If the assets are operating assets, a corporation may be the best option with regard to business protection and tax savings.
Limited liability companies carry some of the advantages of corporations and they allow tax benefits in some circumstances. In most cases, LLCs are the better choice for transferring real property. They allow for the transfer of LLC units rather than corporate shares. They also allow for the transfer of an ownership interest by gift during life, by bequest after death or via sale in exchange for contract or cash.
A well-designed plan for the transfer of family assets makes farm inheritance disputes less likely. Individuals who have questions about estate planning, probate, asset transfer or other issues may want to consult an attorney. An attorney with experience in estate planning may be able to tailor a plan to meet the client's needs and goals. An attorney may be able to draft a valid will or establish an LLC for use as a transfer instrument.