Wind turbines on farmland in Iowa. Image by Mark Hesseltine from flickr.com.
The article is not a substitute for legal advice.
Developing a farm succession plan that allows the next generation to take over the farm and provides for non-farm heirs is not an easy task. Often you will want to treat your children equally but keeping the farm viable for the next generation may not allow for equal treatment. Dividing the farmland equally may result in one heir getting fewer acres needed to support a family. Your heirs are human and will potentially carry grudges against a sibling. A recent decision out of Iowa highlights what can happen when a farm succession plan fails. In Gent v. Gent, Thomas sought an injunction from the Iowa courts to limit how his brother, John, could utilize family farmland John had leased. John had initially leased the farmland from their parents for twenty-five years. This court decision highlights why families should work to develop plans that work towards their goals. There is no one size fits all approach in this process and families will have to understand that communicating, goal setting, and adopting can be important in this process. Continue reading
This post is not legal advice.
Many of you have farm succession plans or estate plans that may handle issues related to on-farm heirs and off-farm heirs. But have you communicated decisions in these plans to both sets of heirs? An interesting case out of North Dakota, In re Estate of Feldmann, addresses that issue. In this case, the Supreme Court of North Dakota agreed that testimony showed the father had gifted all the farm equipment to the on-farm heir and was not apart of the off-farm heir’s share of the estate. The on-farm heir was also entitled to the wheat crop growing on the inherited farmland. The off-farm heirs were only entitled to proceeds from the wheat crop harvested at the time of the dad’s death. Families should discuss these issues to make sure that everyone is on the same page, so heirs understand how the property will be treated at death (or when it is gifted to another heir) to reduce tensions. Continue reading
Over a year ago, I launched the Maryland Risk Management Education Podcast. In the podcast, I discuss recent court decisions, developing issues, and interview interesting people. New episodes are released every two weeks. Recently released episodes include:
Photo by Dave Emerson via Flickr
I’ve been out discussing farm succession planning for the past few weeks with a great team of co-presenters. With the workshops, I cover the tools that can help pass the farm on to the next generation or achieve other goals. One tool is co-owning property in a way that allows for ease of transfer. Owning property as a joint tenant or as cotenants can come with different rights and responsibilities. Continue reading
Photo source, USDA
This post is not legal advice or tax advice
For anyone not paying attention, late last month the IRS announced the revised federal estate tax and gift tax limits for 2017. For 2017, the federal estate tax limit will increase from $5.45 million to $5.49 million. The federal gift tax limit will remain at $14,000 for 2017. In Maryland, state estate tax limits will increase to $3 million (up from $2 million in 2016). Continue reading