Family Owned Farms & Ranches
What do you need to know?
Estate Planning Farmers and Ranchers
Passing down a family owned farm or ranch to the next generation can mean a lot to both members of the family. However, over 70 percent of all family businesses fail to be transferred to the next generation. Why?
A Farmers Problem
Ranchers and farmers alike, have a distinct and common problem. And that is, of being land rich and cash poor. A farmer may have millions of dollars tied up in farmland, machinery, buildings and livestock but have little when it comes to cash on hand. Farmers know of the stress that this can take on them and their family. It is a big enough problem while they are alive, but it can turn into an even bigger problem when they pass away. What is the big problem? The problem is that federal and gift estate taxes are based on the current market value of the asset owned by the decedent at the time of death. They do not take into account what type of asset it is, which can result in a very large tax bill and no cash on hand to pay it with. All to often, the only option that the surviving family members have is to sell necessary equipment or livestock in order to pay the tax bill. Unfortunately, once this is done, it may be hard or impossible to keep the farm running. And thus, the family legacy is gone.
Estate Planning Solutions
While it may be hard to pass down your farm or ranch to the next generation, it is not impossible. One of the most important things to do, is to sit down with an estate planning attorney to discuss how you can create a plan that will make this transition move smoothly to the next generation. And once you have your estate plan in place, it is important to keep it up-to-date.
Call us today at (503) 241-1215 or contact us to discuss how we can help you create a plan that will keep your family owned farm or ranch going, as you pass it on to the next generation.
Estate Planning Articles
These reports are compliments of Schneider Rasche LLC and were written by The American Academy of Estate Planning Attorneys.