Keeping the Farm in the Family: 7 Succession Planning Mistakes to Avoid
Farm succession planning is about more than deciding who receives the land. It involves the farm business, equipment, leases, debt, management responsibilities, family relationships, and the future of the operation.
For many Indiana farm families, these decisions are closely connected. A plan that works for a grain operation near New Castle may look different from one designed for a livestock farm near Rushville, a family farm near Anderson, or a landholding that includes leased acreage near Muncie or Richmond.
The need for thoughtful planning is becoming more apparent. A 2026 report discussing Purdue agricultural research identified farm transition as one of agriculture’s most significant long-term challenges. Financial pressure, changing land values, and uncertainty surrounding the next generation can make a transition more difficult when families wait too long to address it.
Good planning does not remove every difficult decision. It gives families a clearer way to evaluate those decisions.
1. Waiting until a crisis forces the conversation
The first mistake is delaying the conversation entirely.
Farm families may avoid succession discussions because they involve retirement, death, family expectations, or changes in control. Some owners may feel that there is still plenty of time. Others may worry that beginning the conversation will create conflict among their children.
Delay, however, can leave the family making important decisions under pressure. An unexpected illness, incapacity, or death may create immediate questions:
- Who can manage the farm?
- Who can sign checks or leases?
- Who owns the land and equipment?
- What happens if one child farms and another does not?
- How will debts and expenses be paid?
A better approach is to begin while the current owner is healthy and able to participate. The first discussion does not need to produce a final plan. It can simply identify the family’s goals, concerns, and unanswered questions.
Starting early creates room for thoughtful decisions rather than rushed ones.
2. Treating farm succession planning as a one-time task
A will or trust signed years ago may no longer reflect the farm family’s circumstances.
Land values change. Equipment is purchased or sold. Children marry, move away, or join the operation. New grandchildren may be born. A farm business may form an LLC, take on debt, add a new lease, or become involved in a solar or wind project.
Indiana’s 2026 changes affecting farmland property taxes and the treatment of certain energy-related land uses are another reason to review the plan. Farmland assessments, supplemental deductions, and the classification of land used for solar or wind projects may affect the financial assumptions behind a transition plan. The legal and tax consequences depend on the particular property and arrangement.
A succession plan should be reviewed after major changes and periodically as part of responsible farm management. A review may be appropriate after:
- A death, marriage, divorce, or birth;
- A major land purchase or sale;
- A change in farm ownership or business structure;
- A new lease, easement, or energy agreement; or
- A significant change in the farm’s debt, value, or income.
Planning is not complete merely because documents have been signed. The documents must continue to match the farm.
3. Keeping the plan secret
Some families believe that the owner’s wishes should remain private until the plan is needed. Privacy has an appropriate place in estate planning, but complete secrecy can create confusion and resentment.
If one child expects to operate the farm while another expects an equal share of the land, the family may be carrying two very different understandings of the future. Those expectations can become difficult to resolve after a parent dies or becomes unable to manage the operation.
A family meeting does not require the owner to disclose every financial detail. It can focus on the broad goals:
- Who is expected to manage the farm?
- Is keeping the land together a priority?
- What role will non-farming children have?
- How will major decisions be made?
- What happens if the intended successor cannot continue?
Clear communication does not guarantee agreement. It does, however, give family members an opportunity to understand the plan and raise concerns while the owner can still explain the reasoning behind it.
4. Assuming fairness requires treating every child exactly the same
Equal and fair are not always the same.
A child who has spent years working on the farm may have different responsibilities, contributions, and expectations than a child who built a career away from the operation. Dividing every acre, tractor, and business interest equally may appear simple, but shared ownership can create serious management problems.
For example, equal ownership among siblings may lead to disagreements about:
- Whether land should be rented or sold;
- How much compensation the operating child should receive;
- Whether equipment should be replaced;
- How farm income should be distributed; or
- Whether a family member can sell an interest to someone outside the family.
A thoughtful plan evaluates the family’s circumstances rather than relying on a formula. Some families use separate assets, life insurance, business interests, or carefully structured ownership arrangements to recognize both the farming child’s role and the other children’s interests.
The goal is not necessarily identical treatment. The goal is a clear and workable plan that reflects the family’s values and the farm’s needs.
5. Relying on joint ownership or an informal promise
“Everyone knows what Dad wanted” is not a complete succession plan.
Joint ownership, beneficiary designations, handwritten instructions, and verbal promises may not address the practical issues that arise when several people inherit farmland or farm assets. They may also fail to protect the operation from creditor issues, divorce, disagreements, or the financial needs of an individual owner.
A farm may need a more deliberate structure. Depending on the circumstances, that may include:
- A farm LLC or other business entity;
- An operating agreement;
- A buy-sell or redemption arrangement;
- Separate ownership of operating assets and farmland;
- A long-term lease between landowners and the farm business; or
- Restrictions governing transfers to non-family members.
There is no single structure that fits every Indiana farm. A plan should be based on the ownership, management, financial, and family goals involved.
An agricultural lawyer can help evaluate those options and coordinate them with wills, trusts, powers of attorney, and other estate planning documents.
6. Focusing only on taxes and overlooking cash needs
Tax planning matters, but taxes are not the only financial issue in a farm transition.
A family may need cash to pay debts, expenses, final medical costs, or the value of an inheritance owed to a non-farming child. If the plan does not provide enough liquidity, the family may have to sell land, equipment, or livestock at an inconvenient time.
Indiana currently does not impose a state estate or inheritance tax, but federal tax rules, income tax consequences, debt, property taxes, and transaction costs may still affect the transition. The details depend on the family’s assets and the way property is transferred.
In addition, a farm that includes leased land, conservation arrangements, easements, or renewable-energy agreements may require additional review. The income, tax treatment, obligations, and transfer restrictions connected with those agreements should be understood before ownership changes.
A sound plan considers both the value of the farm and the cash required to operate and transfer it.
7. Planning for death but not incapacity
Many families make a plan for what happens after death but overlook what happens if the farm owner becomes unable to work or make decisions.
A serious illness or injury can create immediate operational problems. Someone may need authority to manage accounts, sign contracts, communicate with lenders, handle leases, or make medical decisions.
Farm succession planning should address incapacity as well as inheritance. Depending on the circumstances, this may include:
- Durable powers of attorney;
- Health care directives;
- A temporary management plan;
- Backup decision-makers;
- Written responsibilities for the next generation; and
- Instructions for handling farm accounts, leases, and equipment.
The plan should also identify what happens if the intended successor dies, becomes disabled, or decides not to continue farming. Backup plans are not a sign of doubt. They are part of responsible preparation.
A practical path forward for Indiana farm families
The Purdue farm succession planning resources emphasize that a successful transition involves more than transferring property. Families must consider management, finances, communication, ownership, and the skills needed to operate the business.
A practical starting process may include:
- Identify the family’s goals for the land and the farm business.
- Create an accurate inventory of land, equipment, debt, leases, accounts, and ownership documents.
- Discuss management responsibilities and possible successors.
- Review existing wills, trusts, beneficiary designations, and powers of attorney.
- Evaluate business structures and ownership options.
- Coordinate with an accountant, financial professional, insurance agent, and attorney as appropriate.
- Set a schedule to revisit the plan.
The Law Office of Jason Marshall, LLC provides farm legal services for Indiana farmers, landowners, and agricultural businesses. The firm assists with farm succession planning, agricultural business formation, leases, contracts, land issues, and related estate planning concerns.
Jason Marshall’s background as a former Army Judge Advocate and current Army Reserve Judge Advocate informs a careful, disciplined approach to complex decisions. That experience supports the same values farm families need during a transition: preparation, clear communication, sound judgment, and a practical strategy.
For families considering a transition, the firm’s resource How Can I Keep My Farm in My Family? offers another starting point.
A conversation with an estate planning attorney in Indiana or agricultural lawyer can help clarify the issues before they become urgent. The right time to begin may be before every detail is settled. What matters first is understanding the family’s objectives, identifying the risks, and building a plan that can support the next generation.
