As Minnesota is so dependent upon agriculture for its livelihood, there is increasing concern that farmers will not be able to pass the farm on to their next of kin. Without the ability to pass the farm on from generation-to-generation, startup costs may make it prohibitive for many to continue on with the practice.
Seminars have been given up in the St. Cloud area concerning estate planning for farmers. The first seminar was presented in 2013, and there are plans on holding such seminars twice during 2014. Part of the focus in these seminars will concern the Minnesota gift tax recently enacted and the 2012 farm exemption.
The gift tax that was put into place on July 1, 2013 places at 10 percent flat rate upon gifts that are in excess of $1 million. However, there has also been a $4 million farm exemption put in place.
There are many young people who wish to keep farming, but maintaining ownership over the land can sometimes be a challenge. We’ve fortunately seen a stabilization of crop farming during recent years. Livestock prices are also expected to increase that could result in improved equity of farms.
Being able to preserve the family farm will require a great deal of planning, however. “They need to think very carefully about what they would like to see as the legacy of the family farm,” said one estate-planning attorney.
When it comes to an estate plan, finding an attorney who can provide beneficial services means locating that professional who understands the big picture. It can mean creating a plan and understanding the tax consequences of distributions. It can also mean finding a professional who understands all the necessary legal options available for a client.
Source: Minnesota Farm Guide, “‘Keeping the Farm in the Family’ seminar at Central MN Farm Show,” Andrea Johnson, Feb. 11, 2014