It is important that farmers considering using an LLC to transfer land take the time to think about how they should manage the management of the operation while they are in transition. The LLC Enterprise Agreement must define in writing the decisions made by senior and junior farmers on a wide range of topics, including at least the following: When reviewing, we are obliged to interpret the contract according to its terms and legal law. We determine the intent of the parties who form the company, based on the language of the contract. The enterprise agreement offers only one option for a potential member to show consent to membership: the Joinder agreement. We note that none of Felt Farms LLC`s shareholders met the contractual terms of membership by signing a Joinder contract before the 90-day legal period expired. The LLC was dissolved on February 3, 2016. [Quote omitted.] The court dismissed the complaint and found that David became a Class A member within 90 days of Richard`s death; Daniel and Susan have committed to the operating contract and membership in accordance with the statutes; and that the siblings` membership in the LLC corresponded to the intention to honor [Richard`s] intention when he founded the LLC. The LLC also facilitates the donation as a strategy to reduce or potentially eliminate inheritance tax. Functionally, the way the Family Farm LLC is a gift strategy, by the generation that forms wealth (parents) an LLC, is made both manager and members. The generation that receives the wealth (children) becomes a member of the company.

First, the parents hold all the shares of the company with the wealth it represents. Over time, members` interests can be given to children within the limits of gift taxes (currently USD 14,000 for 2017) and parents retain control of the company and its assets as managers. As noted in the notice above, the LLC`s operating contract created Class A (non-member) and Class B (member units) „revenue units“ and „ownership and voting units.“ The agreement required the administrator`s written agreement for the transfer of Class A units and the unanimous agreement of Class B members for the transfer of Class B units. Suppose a dairy farm has a dairy herd of 45 and 240 hectares of arable land. The young party gives birth to 12 months of work, pays half the expenses for livestock, owns half the cattle and owns a tractor worth $25,000. The elderly party provides 12 months of work, pays the other half of the livestock costs, owns half of the cattle, owns all the equipment and most of the machinery and owns the real estate. As noted below, the younger party provides $56,300 in resources and the older party $196,400. Gross income is divided in the same proportion as the value of contributions. How to manage conflicts between LLC members? What happens when a couple is involved in the transfer and a divorce occurs? What about the unexpected death of a member? In these situations, is mediation necessary? What state laws will apply and which court would deal with legal action? If older farmers plan to retire to Arizona while junior farmers are in Nebraska, the cost of non-governmental action could be prohibitive for either side.