Community Agriculture Alliance: Estate planning
Two things are sure in life: death and taxes. For family agriculture, one of these also has meant the other, and the idea of having to sell the farm or ranch to pay inheritance taxes is an unpalatable consequence of death.
Because of this fear, most farm and ranch families have spent much time, effort and money to develop estate plans that ensure an agricultural property and business can be handed down to the next generation.
After developing such an estate plan, most families think they’ve nailed the target. But do any question if they’ve been shooting at the wrong target all along?
Estate planning takes care of one thing well: the transfer of ownership and/or value to another person or people in a way that eases or eliminates the inheritance tax burden.
What it doesn’t typically take care of, though, is determining a process for succession of management and business operations that ensure the long-term, sustainable continuation of the farm or ranch business.
There are many families who think they’ve gotten everything taken care of in their estate because they have an estate plan, and then they have to sell their ranch because no one can agree on the particulars of running the business.
Succession or multigenerational planning is a different and more thoughtful way to approach the passing on of a farm and ranch.
Looking at business structure, ownership structure and individual family member’s wants and desires, succession planning provides a clearer path for the farm or ranch’s continuation. The entire process is different: family discussions facilitated by trained succession planners (not lawyers) help members understand what each family member wants or needs, where they’re coming from and helps determine how communication about the future of the farm or ranch will occur.
Creating common family and/or ranch mission and vision statements based on a shared set of values brings everyone to a place of common understanding, a place from which solid decisions can be made.
A small group of Extension personnel soon will be undergoing training to learn how to facilitate these important family conversations.
Using our many available resources, we hope to help families make solid succession plans that keep the family and the ranch intact.
Additionally in Northwest Colorado, Extension is pleased to partner with John Perry J. Vasquez and Beverly Rave to host a roundtable discussion this month that focuses on how to start your own succession plan.
Vasquez, the creator of an intergenerational strategy called Estate Optimization and Rave, the former field operations manager at the Colorado State Land Board, will share what is working and what is not for farm and ranch families that hope to keep the family farm or ranch thriving over multiple generations.
Join us in Steamboat Springs at 6 p.m. Sept. 23 at the Routt County Courthouse’s Commissioners Hearing Room or in Craig at 6 p.m. Sept. 24 at the Moffat County Extension Office for this conversation. A light supper will be served.
Visit http://www.rcextension.colostate.edu or call the Routt County Extension Office at 970-879-0825 for more information.
Todd Hagenbuch is an extension agent for the Routt County CSU Extension Office.