Farm Law and Ag Law Blog

     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-...

                                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 t...

                                    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 per...

  4 types of LLCs that can benefit farm operations TAGS:  RISK MANAGEMENT   FARM SUCCESSION   FARM OPERATIONS Tom J. Bechman LIMIT LIABILITY: Especially farms that operate semitrucks, even to haul their own grain, may want to consider separate LLCs for liability reasons, says lawyer John Schwarz II. If you don’t already operate your farm business through limited liability companies, see if one or more of these would work for you. Darrell Boone  | May 07, 2020 John Schwarz II, Royal Center, Ind., is a practicing lawyer and a farmer. He strongly believes in limited liability companies as a great way to structure your farm business. An LLC limits personal liabilities and provides other benefits. So why don’t more farmers use them? “The main reason is fear,” Schwarz says. “People fear things that sound complicated, and if you want to see farmers head for the door, just mention the dreaded words ‘more paperwork.’” Related:   Get your farm ready to 'play defense'...

Get your farm ready to 'play defense' TAGS:  INSURANCE   FARM SUCCESSION   RISK MANAGEMENT Darrell Boone PROTECT THE FARM: John Schwarz II jokingly calls himself “the lawyer with the tractor.” He works to convince farmers why they need to structure their business properly. Insurance is not enough. Select a business structure that provides personal liability protection. Darrell Boone  | May 06, 2020 News flash: Personal injury law is big business. There are hordes of personal injury lawyers, like “The Big Rig Lawyer” or “The Hammer,” promising to sue you and win a huge verdict for their clients and themselves. In contrast, lifelong farmer and ag law attorney John Schwarz II, Royal Center, Ind., operates a practice that helps farmers protect themselves in today’s precarious legal climate. Schwarz says many factors have drastically increased risk and liability. They include: an increase in farm accidents, up 13% in the past five years and 31% in the past 10 years more s...