How Do I Set Up a Trust for My Farm in Nebraska? (2025 Step-by-Step Guide)
Sep 29
4 min read
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Updated Sept. 30, 2025
Quick answer (read this first)
To set up a farm trust in Nebraska: choose your goals → pick the right trust (usually a revocable living trust) → draft the trust → sign with proper formalities → “fund” it by retitling land, equipment, and accounts → align leases, loans, insurance, and FSA/NRD records → keep a simple playbook for your successor. A trust can avoid probate and keep operations running, but it doesn’t eliminate Nebraska inheritance tax and won’t protect assets from long-term-care costs by itself.
Step 1: Get clear on goals
Keep the land intact and the operation running (who farms; who owns).
Treat on-farm and off-farm heirs fairly (equalize with cash/life insurance).
Minimize court delays (probate) and reduce conflict with clear instructions.
Map liquidity so nobody has to sell acres to pay taxes, debts, or buy-outs.
Step 2: Choose your trust type
Revocable Living Trust (RLT): Most common for family farms. You stay in control while alive; the plan activates at incapacity/death; avoids probate when funded.
Irrevocable trusts (advanced): Used for specific tax/asset-protection goals; require giving up control. Only use with counsel.
Step 3: Name the key people
Settlors/Grantors: you (and spouse).
Trustees: you while alive; then successor trustee(s) (person or corporate).
Beneficiaries: who receives what, when, and how (e.g., lifetime use of homeplace; cash equalization for siblings).
Add Trust Protector (optional) to fix technical issues later.
Step 4: Draft the trust (farm-ready provisions)
Ask your attorney to include:
Trustee powers tailored to agriculture (sell grain/livestock, sign FSA forms, borrow/pledge, sign leases, manage conservation contracts, handle water rights).
Operating instructions: who runs the operation this season if you’re ill; authority over inputs, custom work, pasture leases.
Distribution rules for on-farm vs. off-farm heirs (buy-out terms, timing, appraisals).
Equalization language (insurance or non-operating assets).
Special assets: brand, water/NRD permits, pivot/equipment, stored grain, livestock, carbon/CRP/WRP, wind/solar leases.
Trustee fee & accounting rules, and a dispute-resolution clause.
Step 5: Sign correctly
Execute the trust and a short Certification of Trust (so you can prove the trust exists without handing out the full document). Keep originals safe.
Step 6: “Fund” the trust (the part most families miss)
Funding means retitling/assigning assets to the trust or naming the trust as beneficiary. Use this checklist:
Real estate (farm & ranch land)
Prepare and record a deed transferring each parcel to: “[Your Name], Trustee of the [Your Family] Revocable Trust dated [date].”
Use the full legal description; sign before a notary; record with the county Register of Deeds.
Record an Assignment of mineral rights if applicable.
Update title insurance and talk to your lender before moving mortgaged property.
Water, wells, and NRD/FSA items
Update well registrations and allocation records to reflect ownership/trustee authority.
Update FSA/USDA farm/tract numbers, CCC-902/901 signatures, AGI compliance, and leases (cash or crop-share) to the trustee or the operating LLC (see Step 7).
Entities, equipment, and inventory
If you operate through an LLC, assign membership interests to the trust (not the machinery itself).
If you operate personally, consider moving equipment/inventory to an operating LLC first, then have the trust own the LLC.
Update UCC filings, vendor credit accounts, and insurer named insured.
Bank, brokerage, and insurance
Retitle non-retirement accounts to the trust.
Update beneficiaries on life insurance/retirement accounts (often to the trust, or to a spouse then the trust).
Add the trustee as loss payee where needed.
Digital & contracts
Assign leases (pasture, crop, wind/solar), CRP/conservation contracts, and custom feeding/grain contracts to the trust or operating LLC.
Store logins in a password manager with trustee access.
Step 7: Trust + LLC = smoother operations
A common, farm-friendly structure:
Trust owns the land and LLC membership.
LLC owns equipment, inventory, and operating contracts; its Operating Agreement sets buy-sell terms (valuation, payment schedule, right of first refusal).
Why it works: Trust provides probate avoidance and distribution control; LLC provides liability protection, clean management, and buy-out mechanics for on-farm heirs.
Step 8: Coordinate taxes (plain-English notes)
Income tax: Your RLT uses your SSN; nothing changes in how you file while you’re alive.
Step-up in basis: Assets included in your taxable estate generally get a basis adjustment at death—important for land and equipment planning.
Nebraska inheritance tax: A trust can avoid probate, but not inheritance tax. Who receives assets (and their beneficiary class) affects the tax bill.
Federal estate tax: Only an issue for larger estates; still plan valuations and liquidity so no one is forced to sell acres to pay tax.
Step 9: Put a simple “Successor Manager Playbook” in the binder
One 3–5 page sheet your trustee can use on day one:
Who to call: banker, insurer, accountant, attorney, agronomist, landlord, custom operators.
Operating calendar: planting/harvest windows, feed schedules, key renewal dates (leases, lines of credit, insurance).
Account & policy list: loans, input accounts, grain contracts, equipment leases.
Where things are: keys, titles, bin locks, manuals, brand papers, water/NRD files.
Nebraska farm-specific FAQs
Does a trust protect my farm from nursing-home costs?
A standard revocable trust does not shield assets. Protection planning involves various tools and trade-offs—seek counsel before making any moves.
If I use a trust, do I still need a will?
Yes—a short pour-over will (and guardians if you have minors). It “catches” anything left outside the trust.
Can a Transfer-on-Death (TOD) deed replace a trust?
TOD can avoid probate for a single parcel, but it doesn’t handle minors, multi-parcel control, buy-outs, or tax equalization. A trust-centered plan better serves most farms.
How long does this take, and what does it cost?
Most families finish in four meetings—Planning, Design, Review, Signing—over a few weeks. Costs depend on parcel count, entities, and complexity; we quote flat fees up front.
Common mistakes to avoid
Unfunded trust (titles/beneficiaries never updated).
Mixing operations with land (no LLC or weak Operating Agreement).
No liquidity plan for taxes/debts/equalization.
Naming minors outright (forces guardianship court).
Trust says one thing, leases/loans say another (paperwork mismatch).
Bottom line / Next step
A Nebraska farm trust isn’t just paperwork—it’s how you keep acres intact, keep the operation running, and treat every heir fairly. The winning setup for most families is Trust + Operating LLC, fully funded and aligned with leases, loans, water/NRD, and FSA records. If you’d like a clear, flat-fee plan tailored to your parcels, entities, and goals, book a Planning Session and we’ll map it out step by step.
