Many people, including farmers, ranchers, and others, believe that the easiest way to plan their estates and avoid probate is to own property in joint names with family members. However, farmland or ranch property that is jointly owned and enrolled in programs administered by the U.S. Department of Agriculture may result in subsidies being left on the table. Aside from this, joint ownership causes you to give up control of your real estate. Unlike other planning options, joint ownership may not be easy to change, since “undoing” joint ownership can have significant costs and tax implications.
Holding real estate in the name of a business entity (corporation, partnership, or limited liability company) or a trust is a better option and will allow you, whether you’re a farmer or rancher, to maximize subsidies, minimize liability, and retain control.