As we progress through 2025, many might not be thinking about estate planning, but it’s often the top-of-mind thing for many operators. We usually do not want to contemplate our deaths or often believe we can put off succession planning for tomorrow. Although it might not be the highest priority for agricultural operations, taking a minute early on and setting up a succession and estate plan can allow the operation to continue successfully for the next generation. This process will often require communication, goal setting and understanding the tools the operation may require.
Succession and estate planning starts with communication and goal setting. Talking with family members early on can help us understand what they hope to get from the succession planning process. The farm may have one child who has stayed back to work on the farm while other children may have successful off-farm careers with no intention of returning to the farm. Discussing this early on and understanding the child's goals that stayed on the farm can help plan for the succession planning process.
For example, if the operation has one child, Stacy, who has stayed on the operation and helped it expand, talking to Stacy early in this process can assist her parents in understanding Stacy’s goals for the operation long term and, at the same time, may highlight areas in which Stacy needs help in development to continue the operation and be successful. At the same time, Stacy’s parents would eventually like to step back from the operation. Understanding these goals for retirement planning will help with a better understanding of the succession planning process. Finally, for any off-farm children, parents will better understand what they hope to gain from the operation at their parents’ retirement or passing.
You may struggle to communicate with your family members on this topic. That is 100% normal, and resources are available in many states to assist these operations. The International Farm Succession Network has certified farm transition coordinators who can help assist in starting in many states. At the same time, many states have USDA-funded ag mediation programs that can also be used to help start this process.
In many cases, these resources may be free or at a lower cost for you to utilize to begin the process. This will often save you money working through this process while not in the attorney’s office.
After looking at the goals, the family can start thinking about succession planning and estate planning tools with an attorney and accountant. In many cases, these goals may include the goal of estate tax minimization. Working with a good attorney and accountant can assist in this goal and ensure the other goals are met through the appropriate tools. Standard tools that many may look at are wills, trusts and gifting. Other tools include potentially a business entity, property titling and others. The attorney can assist you with understanding how each of these tools can better facilitate the goals you have set up.
A will is just a legal expression of an individual's wishes about the disposition of his or her property after death. A will must meet the state law requirements to be valid and, depending on where real property is owned, would need to be valid in all states where real property is owned. With a will, it will be proven as a valid instrument after the person’s death through a process known as probate. As mentioned earlier, if the operation owns farmland in multiple states, the will must be probated in multiple states.
To avoid the probate process, many people look toward living trusts. A living trust allows people to manage their assets in a trust during their lifetime. Upon the person’s death, the terms of the trust would dictate how the property should be distributed to the heirs. This process avoids probate and allows for real property in multiple states to be passed on without probating in multiple states.
Other tools might be utilized to facilitate the goals. For example, gifting may be an option if the operation is nearing federal estate tax limits (or even state estate tax limits for those states that still have estate taxes). In 2025, federal estate tax limits are $13.99 million for an individual and $27.98 million for a couple. Federal gift tax limits in 2025 are $19,000 to an individual or $38,000 from a couple to an individual. Gifting is a way to move assets in the succession plan to the next generation and avoid estate taxes.
Once the plans are developed, keep in mind that situations may change or what we thought would work may not be working. Do not be afraid to set up annual meetings to determine if the plan is currently working, what might need to be tweaked or if other changes might need to be made. In many cases, this may not require changes to be made by an attorney, but always check with the attorney to make sure the changes will not need to be updated in any agreements that might develop in the succession plan.
Although we may have more important things to do in the operation, taking time to develop succession plans and estate plans can significantly assist in making sure the farm remains successful in the future. This process may seem daunting, but resources exist to help you get started early and save costs down the road.
