What will happen to your farming operation after your death? This is a question that many people never take time to ask. If you were to die without a will or a trust this question would be answered by a judge who would be guided by state law. A Last Will and Testament or a trust agreement allows you to control what happens with your possessions when you pass. A Last Will and Testament is a legal document that directs the person you appoint as executor as to how you wish to dispose of all of your property. A Last Will and Testament differs from a trust agreement in that it disposes of all property you own or possess at the time of your death through a legal proceeding known as a probate. A probate is the legal action in which a judge determines the validity of your Last Will and Testament and authorizes your executor to distribute your possessions as directed by your Last Will and Testament. Though it is recommended to consult an attorney when preparing and executing a Last Will and Testament, almost all states will recognize a Last Will and Testament as being legally enforceable if it is: 1) written in your own handwriting; 2) dated; and 3) signed.

A trust agreement is a legal document by which ownership and control of all of your possessions is taken out of your name as an individual or a married couple and put into a trust estate in which you or you and your spouse are named as trustees. A trust agreement allows you, as a trustee, to control your possession in the same manner you did before creating the trust agreement. One benefit of a trust agreement is that a successor trustee can be named who takes over control of your trust estate after you die. This successor trustee can continue the operation of your business as if you were still operating it yourself. Court authorization is not required to change trustees and there is no need to go through the expense of hiring an attorney and filing a probate when the trustee(s) dies. A major difference between a Last Will and Testament and a trust agreement is that a trust agreement allows you to “control your assets from beyond the grave.” This means that your trust estate can continue to operate after your death just as it did before your passing. This is not possible with a Last Will and Testament. The laws that govern trust agreements differ from state to state and are very specific and complicated. Preparation and execution of a trust agreement should never be undertaken without the assistance of an attorney.

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