Updated: Jul 1, 2020
This post is not legal advice
Today I do not post about a legal issue or a farm policy issue, but to highlight tools available to help farm operators develop farm succession plans and estate plans.
Why do you need a succession plan? Simply, many of you want your operations to continue on into the next generation. Many of you have family members working on the farm who will succeed you and will continue the operation in the future. These future operators need to be prepared to take over and run the operation in the future. A farm succession plan is one way to equip those future owners and allow the current operator to hand over control to a prepared future operator.
Before we get started, please note that this post will focus on resources available through University Extension programs around the country. Many private resources also exist, such as Nationwide’s Land as Your Legacy, Farm Journal’s Legacy Project, and many others.
University of Maryland
Drs. Lori Lynch and Wes Musser with the Department of Agricultural and Resource Economics have developed Estate Planning for Farm Families a UME fact sheet focused on providing an overview of the estate planning process and tools available to farm families. Dr. Lori Lynch and I have included recent changes to laws impacting the process to update this fact sheet.
Other resources include Dr. Lynch’s and my Conservation Easements: A Useful Tool for Farm Transition and Estate Planning. This UME fact sheet helps farm families understand how conservation easements can be a farm transition and estate planning tool. Conservation easements can provide needed cash for the operation to equalize the distribution of assets among family members.
To go along with the conservation easement publication, we have also updated Taxes and Land Preservation: Computing the Capital Gains Tax. This fact sheet assists landowners in understanding how the donation of a conservation easement can impact capital gains taxes.
Oklahoma State University
Drs. Shannon Ferrell, Rodney Jones, and J.C. Hobbs have developed Farm Transitions, a workbook for producers starting the farm transition process. The book walks users through starting the process, communicating with family members and key stakeholders, how estate planning figures into the process, and putting the plan into action. This workbook is my go-to book when trying to help family operations get started in the process.
North Dakota State University
NDSU Extension has a program, Succession Planning for ND Farm and Ranch Families. Many of the resources are only available to its program participants. The reason I highlight this program is for the valuable periodic emails. The NDSU program offers weekly emails on tips for succession planning. For those who are in the process or implementing a plan, the emails will provide thoughts to keep you on task, help you implement the plan, or provide additional insights into succession planning.
Center for Farm Financial Management
The University of Minnesota’s Center for Farm Financial Management offers the AgTransitions website. This site provides resources to develop your farm success plan by creating an account and working online through many of the documents required in the farm succession process. The beauty of the website is that the user can share the information with those involved in the process, such as family members, stakeholders, and team members. This sharing can spur further discussion and help you share developing information with those involved.
These are just a few of the resources available to utilize in the farm succession and estate planning processes. I will highlight other resources in a future post. Although not all these resources directly relate to Maryland, many are still useful to Maryland farm families as they begin to work through the farm succession process. For additional resources and upcoming workshops in Maryland, check out the UME page on Farm Transitions and Estate Planning.