Farm valuation can be an important factor in divorce proceedings, especially in an equitable distribution states like Illinois. The farm must be properly valued before making decisions; however, accurate farm valuation can be difficult to achieve.
Here are only three of the factors to consider in order to make an accurate evaluation of a farm.
1. Acreage
Land itself is typically the largest asset in any farm. Farmland has two designations: taxable acres, the total amount of land in a parcel, and tillable acres, the total amount of land that can be used for crop production. Valuation must not only take these distinctions into account but also must accurately assess the market value of the land as well.
2. Zoning
Zoning is not often an issue but, for instance, a nearby airport could restrict structure height. This could eliminate the opportunity to erect a cell tower or impact the use of drones on the property., limiting earning potential. Investigating the impact of right-to-farm laws on the viability of the farm is also important.
3. Crops
The value of agricultural crops are similar to livestock, with a published daily market price that makes assessment simple. However, valuation must also consider factors like crop quality and the cost of market delivery, production contracts, value of crops currently in the field, and predicted harvest yields.
As you can see from only these three factors, farm valuation issues can be complicated. If your divorce involves a farm be sure to take the time to ensure a fair valuation before you make any decisions.