Most farmers and ranchers dream of passing their operations down to the next generation, but that can be a tricky process for some families. Shannon Ferrell, associate professor of ag economics at OSU, is also a lawyer and is known nationally for his expertise in legal issues down on the farm.
“If you ask any producer - farmer or rancher - their core value is that they want to make sure their family can keep this farm operation together to the next generation and that they can keep their family engaged with that operation,” Ferrell says. “There’s lots of emotional and business reasons for wanting to do that.”
Ferrell has presented seminars on estate planning all across the country and says succession planning is more than just making a will or a trust; it’s a process.
“What we’ve really been kind of working on is trying to develop an awareness with our audiences to say an estate plan is a critical piece of this process, but it’s a process - there are lots of steps beyond that if you really want to make this business robust enough to make that transfer to the next generation,” he says.
Estate taxes have often been a concern for families in transferring the farm to the next generation. Ferrell said the latest estate tax reforms have improved in recent years. For example in 2016, he said the exemption level has been raised to $5.45 million dollars. With a spouse, the combined exemption totals $10.9 million dollars before the estate taxes kick in.
“For the vast majority of our operations, there’s not going to be an estate tax bite,” he says. “So long as you take the bull by the horns and do some planning to make sure you take full advantage.”
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