Farm Asset Transfers in Estate Planning in Nevada

Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 1

FARM ASSET TRANSFERS

IN ESTATE PLANNING

IN NEVADA “Owning a family business requires a business succession plan

if you want the business to continueon after your

retirement or death.”

BRADLEY B. ANDERSON RENO NEVADA ESTATE PLANNING ATTORNEY

http://www.wealth-counselors.com/services/estate-planning-services/


Owning a family business requires a business succession plan if you want the

business to continueon after your retirement or death. Important aspects of

your business must be addressed, such as, who will take over management of

the business and how will ownership be transferred. If your business is a farm,

then these issues become much more complicated. Farm asset transfers are a

critical part of succession planning and must be handled by someone very

familiar with the farming industry.


FARM SUCCESSION PLANNING MEANS MORE THAN JUST

TRANSFERRING OWNERSHIP

Farms are very unique businesses that involve very unique assets. Consider all

of the “moving parts” of your farming enterprise. Not only do you have a

substantial amount of land, but you also have specialized machinery and

livestock that make up a significant part of your farming business. Each of these

types of assets must be handled properly to ensure that your farming business

survives the succession from one generation to the next.


THE IMPORTANCE OF TAX PLANNING

Reducing estate taxes is a principal goal of the tax planning component of a

business succession plan. There are many tax strategies of which you can take

advantage, as long as you plan ahead. Allowing an estate planning attorney to

advise you in this area will be a great benefit. But, start planning early. If it is

your goal to keep your family farm productive and growing from generations to

come, your succession plan must be established early on. Knowing how to

transfer the most important components of your farming business is key.


TRANSFERRING FARM LAND

There are basically three ways you can transfer your farmland to the next

generation: sale, gift, or inheritance. Each method has its own advantages and

disadvantages. Many people assume that selling the property to the next

generation will reduce

estate and inheritance

taxes, but that is not

always the case. This

option should be discussed

with your estate planning

attorney to determine the

benefits in your particular

situation. However, if you

choose to sell the land, and

cash flow is an issue for

either you or your children,

an installment sale is always an option.

TRANSFERRING LAND BY GIFT OR INHERITANCE

You can also gift the land to your children, thereby taking advantage of your

annual gift tax exclusion. Just remember that gifting the property does not

create any income for you. Simply leaving the property to your children, through

your will or some other estate planning device, will allow you to continue to use


the property and receive its income throughout your retirement. A major

drawback is that the taxes that will ultimately be assessed on the property will

likely be significant.

TRANSFERRING FARMING MACHINERY AND EQUIPMENT

Much like farmland, transferring machinery and equipment can be accomplished

in several ways, depending on the needs of the parties. The equipment can be

sold outright or through an installment agreement.It can be part of the sale of

the business entity that owns the farm or priced out a little at a time.


SELLING YOUR FARMING MACHINERY TO THE NEXT

GENERATION

Cash flow is often a major issue when it comes to transferring a business,

including a farm. If you are considering selling your machinery and equipment,

as a method of transferring ownership, you must consider cash flow needs as

well. There will also be tax consequences to the seller, which should be

considered. Installment plans are often helpful in relieving cash flow problems

for the next generation. Another option is to sell the equipment piece by piece,

thereby spreading the tax consequences over several years. Gifting the

machinery and equipment is also another option, as long as you consider the gift

tax implications.

TRANSFERRING BREEDING LIVESTOCK

There are some common practices utilized when transferring ownership of

livestock to the next generation. With livestock used for breeding, you may

choose to sell a portion of the herd at a time, while retaining ownership of the

remainder. Another way to do it is by retaining ownership of the breeding herd,

but giving joint ownership of the offspring to the next generation.


TRANSFERRING FEED AND MARKET LIVESTOCK

If you have feed or market livestock, they are typically transferred in a different

manner. One of the most common methods is to transfer ownership of the herd

at the low point of the feed inventory. Another common method is transferring

ownership during the sale and replacement of the livestock.

If you have questions regarding transferring farm assets, or any other business

planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by

calling us at (775) 823-9455.

http://www.wealth-counselors.com/contact-us/


About the Author

BradleyB. Anderson

Prior to founding his own firm in 1995, Mr. Anderson served as a

senior counsel for two major financial institutions and witnessed

the often devastating effects of ineffective estate planning with

many customers of those institutions. When he eventually decided

to venture out on his own, this experience led him to focus

exclusively on estate planning, providing his clients with a full

range of basic and advanced planning options.

Mr. Anderson began his professional life as a teacher of mentally-challenged, visually impaired

students. After four years as a special education teacher, Mr. Anderson returned to school to

obtain his law degree and begin a second career. Upon finishing law school, he went to work

for a civil litigation firm, spending five years handling litigation, probate and wills work. He

then moved on to Wells Fargo Credit Corporation where he served as senior counsel. In 1990

he accepted a position with the First Interstate Bank Legal Division, where he had

responsibility for several divisions, including the Trust Department. In 1995, he began his own

practice as Bradley B Anderson, Attorney at Law. The firm has continued to grow into the

premier estate planning law firm we see today.

Anderson, Dorn, & Rader, Ltd.

Legacy and Wealth Planning Attorneys 500 Damonte Ranch Parkway Suite 860

Reno, NV 89521 Phone: (775) 823-9455

Fax: (775) 823-9456



http://www.wealth-counselors.com/

Farm Asset Transfers in Estate Planning in Nevada

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Transcript of Farm Asset Transfers in Estate Planning in Nevada