USDA Farm Service Agency (FSA (USDA))

as soon as practicable after the death¹

within 60 days of the transfer (or such other period as CCC determines); The contract ends for the affected acreage; the original participant forfeits future payments and refunds past payments with interest and liquidated damages.²

After a borrower dies, FSA continues the Farm Loan Programs debt with any individual liable for it who complies with the loan and security instruments. For a person not liable on the note, the loan is continued under the transfer of security and assumption of debt rules.⁵

A non-program loan continues with a jointly liable borrower. FSA may continue it with someone who inherits title and is not liable if that person makes payments as scheduled and fulfills all other borrower responsibilities.⁵

A spouse, other relative or joint tenant who is not obligated on the note and inherits the security property may assume the loan on the same rates and terms as the original note.⁶

A guaranteed loan is held and serviced by a commercial lender under an FSA guarantee. A transfer to an heir needs written FSA approval, and the transferee applies under 7 CFR 762.110 and meets the eligibility requirements and loan limitations for the loan.⁷

Where a shared appreciation agreement is in place, transfer of title to the borrower's spouse on the borrower's death is not treated as a conveyance that triggers recapture.⁷

When a participant is identified as deceased, FSA applies program and payment eligibility requirements before any payment is issued, so improper payments are not made.¹

When CRP land changes hands, including by inheritance, the Commodity Credit Corporation may approve the new owner or operator as a participant to a new CRP contract for the land. The successor assumes all obligations of the previous participant's contract.²

CCC may remove an operator or tenant who dies during the contract period from a CRP contract when the administrator of the estate fails to succeed to the contract.⁸

On a succession, the annual CRP rental payment is divided between predecessor and successor as they agree and CCC approves. Without agreement CCC divides it as it deems appropriate, and may prorate it on each party's actual days of ownership.⁹

CRP payments otherwise due a participant who dies are paid to the participant's successors as specified in 7 CFR Part 707.¹⁰

The payment limitations of 7 CFR Part 1400 do not apply when land or a commodity passes at a participant's death and the new owner succeeds to the prior owner's contract. Payments cannot exceed what the previous owner was entitled to receive at the time of death.¹¹

For 2 program years after the program year of death, the estate counts as actively engaged in farming if it contributes capital, equipment or land, the representative or heirs contribute active labor or management, and it shares in profits and losses and bears risk.¹²

After that period the estate is not considered actively engaged in farming unless the Deputy Administrator determines, case by case, that the estate has not been settled.¹²

A surviving spouse who takes over farm operations updates FSA records to register as the new operator and executes new program elections as needed.¹

Heirs' property is family land inherited without a will or legal documentation of ownership, which has made it hard to obtain a farm number and take part in USDA programs. Operators who cannot provide owner verification or a lease may submit alternative documents showing general control of the farming operation.¹³

An authorized representative of the deceased contacts the local FSA county office or USDA Service Center. FSA also checks participant records against Social Security's death master file, but that cross-check is not a substitute for notice.¹

If the deceased held an interest in a corporation, trust, limited liability partnership or company, joint operation or general partnership in FSA programs, a representative of the organization also contacts the county office. Updated information on the deceased's share is required to keep the entity eligible.¹

A released payment goes first to the administrator or executor of the estate; then to the surviving spouse, if there is no administrator or executor and none is expected; then to the sons and daughters in equal shares, a deceased child's share passing to that child's descendants.³

After them come the father and mother in equal shares, the brothers and sisters in equal shares, and the heirs-at-law under the law of the deceased's state of domicile. Payment is released without regard to the claims of creditors other than the United States.³

Form FSA-325 is used only when a payment earned by a deceased, missing or incompetent participant is to be issued in a name other than that participant's. Payments are then issued to the qualified claimant using the deceased participant's tax identification number.⁴

Holding and servicing an FSA-guaranteed farm loan; contacted alongside the FSA farm loan office¹⁵

Approving a CRP contract successor and dividing the annual rental payment on a succession^{2, 9}

Serves FSA, Natural Resources Conservation Service and Rural Development customers; a death may be reported there¹⁶

Authorized by the 2018 Farm Bill, it does not lend to heirs directly: USDA makes loans of up to $5 million at 1 percent interest to approved intermediary lenders, who relend to heirs to buy or consolidate property interests and pay the costs of a succession plan.¹⁷

Who qualifies: Heirs, who apply to an approved intermediary lender rather than to FSA