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Maryland Risk Management Education Blog

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Maryland Risk Management Education Blog

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Farm Succession Publications

Valuing On-Farm Heir’s Sweat Equity Is Complicated and Agreements Should Be Developed to Fairly Compensate On-Farm Heirs

October 22, 2018 Mason Grahame, Dale Johnson, Catherine Onumajuru, and Paul Goeringer
Handling sweat equity issues when bringing in the on-farm successor can limit issues down the road where an on-farm heir feels slighted. Image by Edwin Remsberg

Handling sweat equity issues when bringing in the on-farm successor can limit issues down the road where an on-farm heir feels slighted. Image by Edwin Remsberg

See here for the site’s reposting policy.

            Determining the value of sweat equity can be both challenging and controversial for farm families. Sweat equity arises as an issue when an on-farm heir receives payment at below market rate, and the farm business grows in size due to an on-farm heir’s below-market labors. Land in the farm may also appreciate in value due to the work of the on-farm heir.

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Tags Farm succession, sweat equity, estate planning

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