Farm Succession Planning
Our farmer and rancher clients face special challenges in planning for the transfer of their businesses to the next generation. They may want to transfer the operation to children who have built their careers on the farm, yet they also want to be fair to the children who no longer are involved with the operation.
The family, as a whole, should consider:
- How and when will the parents retire?
- Will the farm operation be continued after the death of the parents? If so, by whom?
- Will the children, whose careers are on the farm, inherit a viable operation?
- Will the off-farm heirs be treated equitably?
- Will estate taxes and costs be minimized so the operation can continue?
The answers to these questions are unique to each farm family. This planning is not easy. The family must discuss the expectations of various family members, and, with knowledgeable legal and tax advisors, put together a succession plan. If no planning is done, the family’s vision for the future may not be realized.
Succession planning for the large farm operation may involve the use of complex planning techniques to minimize estate taxes, such as:
- “Special use” valuation of the agricultural land for estate tax purposes.
- Installment payment of estate taxes.
Conservation easements can be used to provide income and estate tax advantages to the landowner. In addition, a conservation easement can preserve the agricultural use of land for the benefit of future generations.
We understand the special concerns facing farmers and ranchers, and we work with them and their accountants and other advisors to develop the succession plan appropriate for each operation.
