In the wake of a particularly difficult recession, many farmers in Texas and across the nation have at least two hopes for the future: retire comfortably and pass their farms on to their children.
But according to a U.S. Department of Agriculture study, less than 40 percent of the country’s farmers have a plan for the future of their land. And with roughly 90 percent of the country’s farms being family owned, it leaves many to wonder what the outlook will be for these farmers.
Many experts agree that having a well thought out estate plan could mean the difference between passing a farm onto future family generations to losing the farm all together. For many farmers, ensuring that a farm stays in continuous family ownerships over the years is important.
But without proper planning, many retiring farmers face the sobering reality that their farm may not pass to the next person in succession. This is alarming to many because there it then begs the question of what happens to the day-to-day operations after an owner retires, or in tragic situations, suddenly dies?
Troubling still, the USDA report points out that only 36 percent of the country’s farm owners had an estate plan to dictate what would happen to their property after they died. Several other issues that complicate things are estate taxes, which the study discovered a majority of farmers were likely to pay these taxes when transferring from one generation to the next.
Attorneys in Texas, and across the nation, suggest speaking with an estate planning expert well before retirement age in order to come up with a comprehensive succession plan, and to make sure that all financial affairs are in order before it’s too late.
Source: KEPTV.com, “Oregon farms face uncertain future as farmers retire,” Mac McLean, Sept. 14, 2012