June 11, 2015
Land is one of the most meaningful and valuable assets parents can leave to their children.
Passing down a farm or a ranch to the next generation can provide heirs with a secure and valuable income stream for years if the land is well managed. That’s why farm and ranch owners should take steps that may protect their land and the revenue it generates for future generations.
Being a successful farmer, rancher or absentee landowner and manager requires a complex collection of skills, says Ed Cowling, Director of Specialty Assets for U.S. Bank’s Wealth Management Group. In addition to understanding the land itself, these operators have to be scientists, commodity brokers, meteorologists, communicators and, most important, business people who know how to negotiate.
“Farming today is very technical,” Cowling says.
“As with any business, it’s absolutely necessary to have a plan in place to transfer that business when the time comes.”
That time is likely going to come sooner than you expect. The percentage of older farmers in the United States is steadily rising, and it is projected that by 2030, 70 percent of farm and ranch land in the country will change hands, according to an April 2010 study by The FarmLASTS Project, a project funded by the USDA. Land and legacy could be in jeopardy without a transition plan in place, says Jim Myhra, Managing Director of the Farm, Ranch and Timber Management Group at U.S. Bank.