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Is it a good idea to have liability insurance on farmland if the land is in a trust?

Rockwell, NC |

We have 43 acres of land in North Carolina that has been transferred to our trust. We have been carrying a general liability policy on the land for that past 2 years but now wondering if this is necessary since we have transferred the land to our trust.

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Attorney answers 3

Best Answer
Posted

Even if the trust does protect your other assets from liability associated with the land, the land itself won't be protected without insurance.

Posted

The amount of liability protection that a trust will provide depends on the type of trust, so we would need additional information in order to fully answer this question. If the trust is a Revocable Living Trust (the type of trust most commonly established and funded during your lifetime) established under NC law, then the trust provides no additional liability protection and so it would be a good idea to continue to carry the liability policy on the property.

Posted

I agree with Attorney Dalman. If the trust is a "revocable" or a "living" trust, then there is no liability protection simply because the property is in the trust. Please consult with an experienced asset protection attorney regarding other mechanisms which are available in your state to provide additional creditor protection. Good luck to you.

This information is presented as a public service. It should not be construed to be formal legal advice nor considered to be the formation of a lawyer/client relationship. I am licensed in Connecticut and New York and my answers are based upon the law in those jurisdictions. My answer to any specific question would likely be different if I were to review a client's file and have the opportunity to interview the client. Accordingly, I strongly urge you to retain an attorney in your jurisdiction with respect to any legal matter.

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