Liability Insurance May Not Save Your Farm, but an LLC Can
Using multiple LLC's can drastically increase the liability protection for a farm. This article discusses the layout of doing so.
First though: I generally hate disclaimers, but I find it necessary to state a few. First, this article is for general information only and is written for the benefit of fellow farmers to consider in structuring their farms. Second, state laws vary, and this article is not state specific. Third, if you feel the need to comment on whether you disagree or that I’m wrong, please first go to: https://www.extension.purdue.edu/extmedia/ppp/ppp-91.pdf. It is an excellent publication from Purdue that is in line with what I am writing about in this article and gives some real life examples.
In closing, remember there are no guarantees that a lawsuit could tie up all the LLCs that consist of the farm or liability could not be found on one of the asset holding LLCs. All of that will be fact specific and depend on the circumstances. However, when properly structured and utilized, having multiple LLC's does add a significant amount of protection.