Farmers Legal Assistance Network

To visit the main page of the Farmers Legal Assistance Network, go to:  farmlawhelp.com



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Traditional Method of Farm Succession Planning is Broken…. Here is How to Fix it.

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                                Part I-Reasons Plans Do Not Get Established.  (Authors’ Note :   This will be a several part series discussing why the current method of farm estate and succession planning is not working.   In this first part, we will discuss the current state of farm succession and estate planning and compare to where it was ten years ago)         After several years of the farm economy in the doldrums, that past 2 years have seen a reassurance leading to record land and machinery prices, as well as just about everything else. Prior to this, many farms were not even sure they would survive long enough to need a succession plan.   Now, we’ve returned to where we were around 2009, 2010, and 2011, when the size of farm estates grew greatly and made it very difficult, if not impossible, for farming heirs to buy out non farming heirs due to the large capital outlay.   With land and machinery at all times highs, the difficulty is even now more profound.              The
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Traditional Method of Farm Succession Planning Broken…. Here is How to Fix it. (Part II)

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     Part II-Reasons Plans Do Not Get Established.   (Authors’ Note :   This will be a several part series discussing why the current method of farm estate and succession planning is not working)  Last month we discussed the fact that statistics show that in the past 10 years, there really has not been much in the form of improvement as to estate and succession plans being created by farmers.      Overall, 75% of farms in the country do not have a succession plan, and that number is roughly the same from ten years ago.   Probably a good follow up analysis, which I have never seen anyone perform, is of the 25% of farms that do have a succession plan, what percentage of those are successful? Continuing our march towards identifying what is wrong with farm succession planning and how to fix it, we need to first look at the upcoming “farmestateaggeddon” that will happen this decade.   According to USDA data, a whopping one-third of America’s 3.4 million farmers are over the ag
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PREPARING YOUR FARM FOR TAX DOOMSDAY

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                                    It has begun.   Nervous clients, including farmers and others, have started calling with growing concern   about what can only be described as nightmarish changes to federal tax laws.   Changes being discussed are a extreme reduction of the current federal estate/gift tax exemption, elimination of step up in basis, elimination of Section 1031 like-kind-exchanges, as well as other drastic changes being proposed by the new administration.   Before delving into the subject matter in more detail, people should remember the immortal words of Yogi Berra when he said, “it’s like déjà vu all over again”, and look back on December 31, 2012.   When the clock was to strike midnight, we were not going to see Cinderella’s carriage turn back into a pumpkin, but the federal gift and estate tax exemption was to plummet   from $5.12 million per person all the way to $1 million   per person.   Prior to that, taxpayers had enjoyed the ability to pass up to $5.12 mill
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