Farm Succession Plan Checklist for Nebraska and Minnesota Families

By Kole Pederson, attorney.

Short answer: A farm succession plan answers three questions. Who will run the farm, who will own it, and how does it pass between generations? This checklist walks Nebraska and Minnesota families through each step, from the first family talk to the final signed papers.

Use it as a guide, not a rulebook. Every family and every operation is different. Check off what you have done, and circle what still needs work.

Phase 1: Talk as a family

Most plans stall here, not in the law office. Start with honest talks before anyone signs anything.

1. Set a meeting with everyone who has a stake. Include the parents, children on the farm, and children off the farm. Spouses can listen in, too.
2. Write down the parents’ goals. Do they want to keep the land in the family? Do they need income to retire? Where do they want to live?
3. Ask each child what they want. Some want to farm. Some want a fair share. Some just want peace in the family.
4. Name a timeline. Will the handoff take two years or fifteen? A rough date keeps the plan moving.
5. Take notes and share them. A short summary after each meeting stops “I never said that” fights later.

Phase 2: Take inventory of the farm

You cannot plan what you have not counted. Build one clear list of everything the farm owns and owes.

• Land. List each parcel, its acres, and how the deed is titled. Pull the actual deeds. Titles are often not what families remember.
• Equipment, grain, and livestock. Note rough values and who holds title.
• Business entities. Gather papers for any LLC (limited liability company, a business that shields owners from some debts), corporation, or partnership.
• Debts. List loans, liens (a lender’s legal claim on property), and who signed each note.
• Leases and contracts. Collect cash rent leases, crop share deals, wind or solar leases, and grazing agreements. See our page on farm leases and grazing agreements.
• Accounts and insurance. List bank accounts, retirement accounts, and life insurance. Write down who each one names as beneficiary (the person who receives it at death).
• Current estate papers. Find any old wills, trusts, or powers of attorney. Many are years out of date.

Phase 3: Decide who runs it and who owns it

Running the farm and owning the farm are two different jobs. Mixing them up causes many family fights.

1. Pick the next manager. This is the person who makes daily decisions. It may be one child or a small team.
2. Decide who will own the land and assets. Ownership can be shared by all children, even if only one farms.
3. Write down who decides what. Who can sell land? Who sets cash rent? Who can borrow money? Put the answers on paper.
4. Plan for a bad year. Agree on what happens if the farm loses money or the farming child wants out.

Treat on-farm and off-farm heirs fairly

Fair is not always equal. A child who spent 20 years building the operation may need more control. Off-farm children still deserve a fair share of the family’s wealth.

• Give the farming child control, and give others value. For example, the farming child gets the right to buy or rent the land. Off-farm children get a fair price or rent.
• Use other assets to balance things out. Life insurance, savings, or retirement accounts can go to off-farm children.
• Count sweat equity openly. If a child worked for low wages to grow the farm, say so in the plan.
• Explain the reasons. A short letter from the parents can prevent hurt feelings after they are gone.

Phase 4: Pick the legal tools

The right tools depend on your goals, your assets, and your state. Most farm plans use a mix of these.

• Will. A will says who gets your property when you die. A will alone usually means probate (the court process that settles an estate). Learn more about estate planning.
• Revocable living trust. A trust you control during life and can change. It can pass land without probate and keep details private. See revocable living trusts.
• Farm LLC or partnership. Putting land or operations in an entity can make it easier to pass ownership in small pieces. It can also set clear rules for managers and owners. See farm LLCs and partnerships.
• Buy-sell agreement. A contract that says how an owner’s share gets bought out. It covers death, disability, divorce, or a family member wanting out.
• Written leases. A lease between the land owners and the farming child protects both sides. It also shows the farming child has a real right to farm the ground.
• Powers of attorney and health care directives. These name who can act for you if you cannot. Without them, the family may need a court to step in.

Phase 5: Plan for taxes and long-term care

Taxes and nursing home costs can force a land sale if no one plans ahead. Look at each one with your lawyer and tax preparer.

1. Nebraska inheritance tax. Nebraska taxes what each heir receives. For deaths on or after January 1, 2023, the rates are:
   • Children, grandchildren, parents, and other close relatives: 1% on the amount over $100,000 per person.
   • Aunts, uncles, nieces, nephews, and their descendants: 11% on the amount over $40,000.
   • Everyone else: 15% on the amount over $25,000.

   A surviving spouse pays no Nebraska inheritance tax. Read more on our Nebraska inheritance tax page.

2. Minnesota estate tax. Minnesota taxes estates over $3 million. Land values can push a farm estate past that line faster than families expect. Minnesota families can learn more on our Minnesota page.
3. Federal estate tax. For deaths in 2026, the federal basic exclusion amount is $15 million per person. Most farm families will not owe federal estate tax. Larger operations should still check.
4. Income tax on sales and gifts. How land passes affects the tax heirs pay when they sell it later. Ask your tax preparer before giving land away during life.
5. Long-term care. Nursing home care can drain savings and land. Medicaid looks back 5 years at gifts and transfers. Gifts made inside that window can delay benefits. Plan early. See long-term care protection.

Phase 6: Hand off management

Papers move ownership. People move management. Give the next generation real decisions before the parents step back.

• Start with one area. Let the next manager run marketing, a crop enterprise, or the cow herd first.
• Share the books. The next manager should see the real numbers, including debt and cash flow.
• Introduce key people. Bring the successor to meetings with the lender, landlords, agronomist, and accountant.
• Write down how things work. Record field history, drainage tile maps, lease terms, and who to call for what.
• Agree on the parents’ role. Will they keep a title, a vote, or just a seat at the coffee table? Say it out loud.

Phase 7: Review the plan every few years

A plan is never truly done. Life changes, and laws change too. Review the plan every three to five years. Review it sooner after any big change.

• A birth, death, marriage, or divorce in the family
• Buying or selling land
• A big change in land values or farm income
• A move between Nebraska and Minnesota, or to another state
• A new tax law
• A health change for either parent

For more planning ideas, the University of Nebraska-Lincoln Center for Agricultural Profitability shares free farm and ranch succession resources. To see how we approach these plans, visit our Nebraska farm succession planning page.

Frequently asked questions

When should we start a farm succession plan?

Start now. Most good plans take years, not weeks. Starting early gives you time for family talks and a slow handoff. It also gives more room for tax and long-term care planning.

Does a will alone work for a farm?

A will is a good start, but it is often not enough. A will usually goes through probate, which can be slow and public. It also does not set rules for who runs the farm. Many families add a trust, an LLC, or a buy-sell agreement.

How do we treat the farming child and the other children fairly?

Fair is not always equal. Many families give the farming child control or a right to buy the land. Off-farm children receive other assets or a fair price. Talk it through together and explain the reasons in writing.

Do Nebraska families owe inheritance tax on farmland?

Often, yes, if land passes at death. Children and grandchildren pay 1% on what each receives over $100,000. A surviving spouse pays nothing. Good planning can sometimes lower what heirs owe.

Can you help if our farm is in Minnesota?

Yes. Our firm is licensed in Nebraska and Minnesota. We serve Minnesota clients fully remotely by phone and video. Minnesota families should plan around the state’s $3 million estate tax exclusion.

Get your succession plan started

Midwest Ag Law helps farm and ranch families, landowners, and business owners across Nebraska and Minnesota. Attorney Kole Pederson works from Henderson, Nebraska, and serves Minnesota clients fully remotely. We start with a free 30-minute call. After the call, we quote a flat fee for your succession plan, so there are no surprise bills. Book your free call today.

This guide is general information, not legal advice. Talk with a lawyer about your own situation.

Sources

• nebraskalegislature.gov/laws/statutes.php?statute=77-2004
• nebraskalegislature.gov/laws/statutes.php?statute=77-2005
• nebraskalegislature.gov/laws/statutes.php?statute=77-2006
• www.revisor.mn.gov/statutes/cite/291.016
• www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax
• www.law.cornell.edu/uscode/text/42/1396p
• cap.unl.edu/succession/