Farm Succession Resolutions for 2024
As 2023 ends, the holiday season is a great opportunity to evaluate your new year’s resolutions from January. How long did you stick to your diet or exercise routine? Did you achieve a specific financial goal? Which hobby did you pick up this past year?
For some farm families, completing or updating a farm succession plan comprised one of those resolutions. If your plan remains unfinished or if you still need to check off a few boxes, consider the following farm succession goals for 2024:
Prepare for the impending estate tax sunset
On January 1, 2026, the current federal estate tax exemption will expire. This will reset the exemption from the highest figure ever seen. The sunset might provide a once-in-a-lifetime estate tax planning event. Farms and families should begin preparing for this event in 2024. This includes updating your balance sheet with fair market values, meeting with your succession planning team, and implementing plan strategies.
Comply with the Corporate Transparency Act
Starting on January 1, Farms operating partnerships, corporations, and LLCs may be subject to the Corporate Transparency Act. This law requires businesses to report their ownership to the Financial Crimes Enforcement Network. Farms and families need to prepare for compliance efforts in 2024.
Reevaluate your plan goals
Your succession planning goals drive the entire process. However, those goals are based on a snapshot in time. Family dynamics, business conditions, markets, farms, and many other factors change over time. Reassessing your farm planning goals to align with current circumstances, or creating goals for the first time, is a great objective for 2024.
Transition verbal leases to written leases
This is one of my favorite recommendations! Farm lease issues are annually the top legal dispute that comes through our office. Most of those problems stem from handshake lease agreements or bare bones contracts that omit key provisions. This year, protect your acreage base converting verbal leases to written leases.
Knock out your “homework”
For our clients, receiving homework in our meetings is a familiar outcome. The most common homework assignment is probate avoidance. This includes creating transfer on death or payable on death beneficiaries as part of the estate planning process. Completing your homework could save thousands in estate administration costs.
Farming is filled with learning experiences and fresh starts. Each crop season or livestock group brings a new combination of variables and challenges. For the new year, consider the succession planning needs of your farm and family. Twelve months later your operation could be in a stronger position to face the trials of 2025.