Navigating Farm Succession Without a Family Heir: Option-to-Buy Agreements with Non-Related Parties

Helping someone outside the family doesn’t mean shortchanging your heirs. Often, this means creating an agreement that allows someone, like an employee, tenant, or neighbor, to buy assets from your heirs, trust, or company. In order to ensure that your wishes are carried out, you might consider an option-to-buy agreement as a part of your estate and transition plan. In an option-to-buy agreement, the person you want to have the option (i.e. an employee, tenant, or neighbor) is referred to as the “holder.” This agreement grants the holder the right, but not the obligation, to purchase the property. If the holder fulfills the terms outlined in the agreement, they can force the property's owners (i.e. your heirs) to complete the sale.