For many Texas residents, estate planning goes beyond passing along assets such as stocks and bonds. Specifically, many families want to pass along farms and ranches and do so in a manner that their heirs can utilize those types of properties. It is no secret that often farms and ranches have to be sold off or broken down into plots for development just so heirs can pay the taxes on them. There are options, though, in estate planning that allows heirs to retain the family farm or ranch and still be able to afford it.
One option families may want to look into is known as conservation easement. This option can be very useful during hard times, such as seen now in the drought. There are currently three types of conservation easements: farm and ranch, wetlands and grasslands.
Grants are also an option for some landowners. Grants often provide matching funds but the landowners must also get funds from state and local governments. The entity is required to provide at least 25 percent of the purchase price. The property must be privately owned and must also be subject to a pending offer. Since 2008, grants of more than $2 million per year have been available.
For those who want to keep their property intact but do not want to farm it in an agriculture way, consider using a wildlife management option. This option allows landowners the ability to stay on the property and to preserve it in a manner that best fits their needs. To qualify, landowners must use the land to promote “breeding, migrating or wintering populations of indigenous animals for human use.” This “human use” can fall into the food, medicine or recreation categories.
These are just a few of the ways estate planning can be used to keep family farms and ranches within the family. When it comes to estate planning, there are many rules and guidelines to consider when hashing out a plan.
Source: The Elgin Courier, “Local landowners learn ways to preserve family lands,” Charles Wood, Nov. 16, 2011