Dynasty trusts might not be for everyone, but they are a succession-planning strategy that can help farm families keep an operation within the bloodline. That’s according to Polly Dobbs, an attorney and Farm Journal Legacy Institute Advisory Team member.
“The farm stays in trust—dynasty’s just sort of a fancy word that says it’s going to go on for a couple generations—so the kids, that next generation, they never truly own the farm,” Dobbs tells “Legacy TV” in an interview. “They get all the income from it, it’s there for their benefit, but the farm, the title of the farm, is in a trust. So the kid can’t lose it in a divorce. He can’t lose it to a creditor. And the kid doesn’t say where his or her interest in the trust goes at death. The trust agreement says that.”
Many farm owners want to keep the operation within the family, even though they love others who have married into the business or become a part of it by other means.
“For a lot of folks, especially when it comes to the family farm, that’s blood. They want the ground to stay within the blood,” Dobbs says. “They love their daughters-in-law, love their sons-in-law, the adopted and step-grandkids. We all act like a big happy family at Thanksgiving for family purposes, but when it comes to owning the farm, that’s blood. That’s one way to make sure that happens. The kids never truly own it, so they can’t goof up, and mom and dad’s plan locks in what happens at the next several generations.”