Many family-owned businesses or family farms are handed down through generations, with children and grandchildren working the land or taking the company in new directions. Unfortunately, sometimes farms and businesses are lost because of inadequate planning or high estate taxes. If you own a farm or have grown a business, you want to make sure you have done what is necessary to protect the legacy you are building.
Hodgkins Law, PLLC provides comprehensive assistance to business owners and to farm owners in and around southern Maine. Give us a call at 207-358-3270 to get advice on growing and protecting your farm or business and to get answers to questions including:
- Why do business and farm owners need help from an attorney?
- When should you get legal help if you own a business or a farm?
- How can a local farm and family business lawyer help?
Why Do Business and Farm Owners Need Legal Help?
If you own a family business or you own a farm, you likely want this to be your legacy. This means you want to hand it down to your children or to the next generation to keep the company going or to keep working the land on the farm. Unfortunately, there are risks to your ability to leave your legacy.
If you own valuable farmland or company assets and you require nursing home care, you have to determine how this care will be paid for. Since most private insurance and Medicare don’t pay for custodial nursing home care, your only option other than spending your own money is to try to qualify for MaineCare. The problem is, the business assets and even the farmland could potentially count as financial resources, which could make you ineligible for MaineCare because the program is means-tested.
You could be forced to sell property and assets and spend down your wealth to pay for the nursing home until you have resources below the allowable level to qualify for MaineCare. Your farmland or family business assets would be gone, spent on nursing care – unless you had a plan to make sure that didn’t happen.
Your farm or business assets could also push your estate above the amount of money you can transfer tax free to heirs after you pass away. This could mean a big estate tax bill, which it might be difficult to pay if wealth is tied up in the farmland or in illiquid business assets. With no way to pay the bill to the IRS, heirs could be forced to sell the property or company you’ve built up, just to pay the taxes.
These are just a few of the major risks which exist that put the continued operations of your family or farm at risk. Irresponsible spending by heirs, divorce and bankruptcy, and a host of other potential sources of loss exist as well. An attorney should help you to address all of the threats to the ongoing success of your farm or business and to the legacy you have created.
When Should You Get Legal Help With Your Family Business or Farm?
Some of the different tools used to protect family farmland or business assets include trusts or a power of attorney (or both) to make sure the company or farmland is managed in case you become incapacitated and cannot take care of them on your own. Trusts can also help to shield your assets from counting for purposes of estate tax valuation or MaineCare eligibility.
These legal tools need to be in place long before a threat arises. For example, if you hope to ensure assets are protected in case you need nursing home care, you must have your MaineCare plan in place at least five years before care is required. Otherwise, MaineCare will disqualify you from coverage for a period of time, forcing you to spend some of your assets.
Because there is always a risk at any moment of your untimely death, or of developing an incapacitating illness or injury, you should get help with your family business or family farm as soon as you can. Your lawyer will help you to put a comprehensive asset protection plan in place and will assist in addressing succession issues as your farm or business passes to the next generation.
How can a local Farm and Family Business Lawyer Help?
An attorney with experience helping business owners and farm owners in southern Maine can provide invaluable advice on protecting what should become your legacy. Give Hodgkins Law, PLLC a call today at 207-358-3270 to find out more about the ways in which we can assist you in keeping your farm or business secure through the generations.