Valuable real estate is bound to be a challenge when it comes to writing a will, especially if there are multiple beneficiaries. But this challenge can deepen if the land is a working farm, especially if the intention is to keep the farm in business rather than sell it. Without proper planning, communication and documentation, the Ontario farmers’ dreams of a multi-generational business can turn into an estate administration nightmare for their families.
There are several things that can make estate administration a challenge for the beneficiaries of farmers. One major challenge is that capital gains taxes or probate can force the sale of a farm. Rural properties in Ontario can often carry a hefty pricetag, and even farmland exemptions keeping the land in the family after death requires some planning.
Additionally, many children of farming parents need to decide whether they are interested in taking over the family business. This is a personal discussion but can also be a financial one. If the business is to be transferred to a child or children, what financial reconciliation and tax credits should be examined first? If the CRA decides the farm is a hobby rather than a business, how might that play into the options available?
It is clear that farming families can benefit from wealth management and real estate expertise when making these decisions. In addition, legal support is a necessary part of any estate planning and estate administration process. An Ontario lawyer can help to ensure that all proper steps are taken for a legal and clearly understood farm succession.