Farmers, Like Other Business Owners, Need to Include Succession Planning in Their Estate Plans
Pullman & Comley Trusts & Estates attorney David B. Bussolotta recently authored an article for the Easton Courier on the need for farmers to include succession planning in their estate plans. With Easton being one of the last remaining rural communities in Fairfield County, family succession planning plays an important role in maintaining the stability and economic viability of the farming town. In this article, David discusses the importance of creating a business plan in conjunction with a succession plan in order for farmers to benefit future generations.
"A farmer is not unlike many small and medium-size business owners. There needs to be operational documents in place that allows someone to take over in case the owner becomes incapacitated or can’t reliably fulfill the farming duties," David says. In the cases where a farmer is unable to find a reliable or willing candidate to take over the farm, they can still take steps to ensure the property is conserved, such as a special easement or covenant being issued to determine how the land will be used.
Staying operational through succession is also important. "Many farms, even here in Connecticut, consist of hundreds of acres where the land value could be substantially higher if it was developed. When the landowner dies there is a special valuation, which is less than the market value of the property, because the IRS always assesses estates based on their highest and best use. Those uses would oftentimes be commercial or residential, and not agricultural," David explains. If classifications are kept up to date and accurate and the farm is operational, there's an income tax that allows that special value for estate planning purposes to be in effect so the next generation can continue operating.
David outlines critical details throughout this informative article. To read the full article, please visit the Easton Courier website.