Farm Service Agency (FSA) Subsidy Programs: When 1 + 1 = 1

I’ll be brief, and in being brief, I’ll gloss over some details. But here’s the low down. A husband and wife farming couple can receive up to $250,000 annually in FSA program subsidies if they grow corn, soybeans, cotton, rice, and the like AND if they are actively engaged in farming AND if they are at risk of loss. Yes, that’s up to $250,000, but only so long as they are not considered “one entity.” (Yes, I realize that most couples don’t qualify for the maximum and that most receive much less, but this is a brief discussion, remember.)

The FSA treats joint trusts–essentially one trust for two spouses–corporations, and LLCs as one entity. Thus farm couples who fit the bill described in the first paragraph DO NOT want the enter into joint trusts, or they could stand to lose up to $125,000–per year. So if your estate planning attorney suggests a joint trust to you. think twice: will you lose out on farm subsidy payments if you go with a joint trust? If you would, then say no.

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