Private Treaty Bu Sales

Passing the Farm or Ranch to the Next Generation

to the kids they could lease it to them. That way they have lease income each year and can make sure their will and estate plan is set up so the land goes to who they want it to, when they pass away,” she explained.

If you want your kids to own the land, it could also be set up so each one owns an equal interest in every acre, or certain kids end up with certain lands. “Equal interest in all of it could put them into a partnership; they have to run the land together or make decisions together, and sometimes this creates problems.”

Sires include:

Se ing Flushes on Donors:

If a person is going to transition by selling the land to someone in the family, it doesn’t have to be priced at market value. “Also there can be a gifting portion, and the gifting exemption is the same as the estate tax exemption,” said Springer.

One Rancher’s Comments

Dan Rorvig, a rancher in North Dakota, said most people wait too long, and maybe don’t educate themselves well enough.

“When talking about passing the ranch to the next generation, some people think it will be a turnkey operation, stocking-stuffer gift, but this isn’t always the case. In our situation, we have a daughter and son-in-law on the ranch. It seems they are interested, and I feel that on down the road they will take over this operation, but it won’t be a gift,” he said.

“The ranch is our nest egg and our life’s work. Often these things have to be long-term purchases. We have a land base and a cow herd to turn over to the next generation, and many dollars’ worth of equipment. We’ve had some good fortune and put properties together but won’t be able to just gift it to the next generation. My wife and I will need the proceeds so we can live and enjoy things with retirement. Right now, we’re trying to help our daughter and her husband gradually get into a better financial position, so they’d be able to bite off a bigger chunk,” Rorvig said. This is a long-term transfer of the family wealth.

Dan Rorvig

“There are tax rules that are helpful, and it’s important that both parties are aware of those and take advantage of them. Most people don’t start planning soon enough, especially if they have a terrible health issue or life-altering event. We need to take time to put a plan in place that can work for everybody and not be forced into something because then everything becomes a knee-jerk reaction. You need a plan laid out so everyone in the family is aware of what needs to happen,” he explained.

“It’s important that the next generation has a true interest. I don’t want them to feel any obligation; this has to be their idea, too,” Rorvig said. If ranching is what they really want to do, it’s better if it can happen without a big tax that no one figured out how to avoid.

Importance of Good Advisors

Transitional planning is different for each operation.

“I had a client who said his neighbor’s mom is putting all her land in an irrevocable trust, and he thought he should do that,” said Springer. “We talked about it and concluded that in his situation he would not want an irrevocable trust for his land. This is why it’s important to have good advisors, to help with your plan, and perhaps an annual meeting. The clients, their attorney and tax advisor can talk about these things.”

If ranchers are not already having annual meetings with their accountant and attorney, this would be a good way to get the ball rolling. “If they can bring the next generation to those meetings, they can start to learn more about the actual business of the ranch;

Passing the Farm or Ranch to the Next Generation

it’s not just knowing how to feed the cows and do the chores,” she said.

“We recommend that people get help, especially with the tax consequences. You don’t want to do something and find out later you have a large tax bill. Also, the more you can have in writing when making any kind of agreement with the next generation, the better, so no one can question it later. I encourage people to communicate about what their plan is, talk with their kids, and make sure everyone is on the same page,” she said.

“We often have several meetings with the client because it can be overwhelming, to hear all the options,” said Snell. “Sometimes we break it into pieces, especially if the client comes in without any kind of planning. We first put a will together, and things that you can always change, then start layering on top of that –whether setting up an entity, or a revocable trust. These are flexible ways to own property and deal with an estate. Having property in trust avoids it going through probate, which in some states is a lot more cumbersome than in others. There are advantages to a revocable trust,” he said.

It’s also helpful to have the children at these meetings so they can understand what is going on.

“The initial meeting is usually just with the parents, and I tell them it’s their property and their decision, but once they have determined a certain direction, they can bring the children into it to let them know what the plan is,” he explained.

It’s good to know your state laws regarding these things. “Usually the clients’ attorney, CPA and financial advisor can work together to make a plan in the family’s best interests. These professionals need to know all the assets, how they are titled, and what the family’s plans are regarding succession,” said Snell.

“One thing many people overlook is doing power of attorney. This can be just as important as someone’s will and trust – to name someone to make decisions if you become incapacitated. This can avoid a lot of strife and having to go to court or into a guardianship,” he said.

Editor’s note:

This is the second piece in a two-part series. The first part was published in the February issue of the Red Angus Magazine. //

National Red Angus Open and Junior Show Results Cattlemen’s Congress – Oklahoma City

2023 Cattlemen’s Congress Red Angus National Open Show

Judge: Craig Sand, Oklahoma

Grand Champion Open Female

MHG Barcelona 107J – Morley Griffith, Shawnee, OK

Reserve Grand Champion Open Female

TC Fancy 09J – Tucker Bayer, Ringle, WI

2023

Grand Champion Open Female

MHG Barcelona 107J – Morley Griffith, Shawnee, OK

Grand Champion Open Bull

Red Diamond El Rey 102 – Jackson Braggs, Salado, TX

Reserve Grand Champion Open Bull

3ACES Ground Work 1502 – Andrew Meier, Clinton, TN

Premier Breeder and Premier Exhibitor

TC Reds – Ringle, WI

Reserve Grand Champion Open Female

TC Fancy 09J – Tucker Bayer, Ringle, WI

Grand Champion Open Bull Red Diamond El Rey 102 – Jackson Braggs, Salado, TX

Reserve Grand Champion Open Bull

3ACES Ground Work 1502 – Andrew Meier, Clinton, TN

Supreme Champion Open Bull – Red Diamond El Rey 102 – Jackson Braggs, Salado, TX

National Red Angus Open and Junior Show Results

2023 Cattlemen’s Congress National Junior Female Show

Junior Show Judge: Alan Miller, Illinois

Grand Champion Junior Female

TC Fancy 09J – Tucker Bayer, Ringle, WI

Reserve Grand Champion Junior Female

H/H Larkaba 1104 – Addison Vowell, Forest, MS

Grand Champion Bred & Owned Female

MHG Barcelona 107J – Morley Griffith, Shawnee OK

Grand Champion Bred & Owned Bull

3ACES Ground Work 1502 – Andrew Meier, Clinton, TN

Reserve Grand Champion Bred &

SFCC Houston 062H – Carly Shuter, Frankton, IL

Pee-Wee Showmanship Winner

Channing Lind

Junior Showmanship Winner Hunter Blakely

Intermediate Showmanship Winner Page Wood

Senior Showmanship Winner

Zachary Griffeth

2023

Red Angus National Pen Show

Pen Show Judge: Alan Miller, Illinois

Grand Champion Pen of Three Bulls

Wallace, Kip – Emerald, WI

Reserve Grand Champion

Pen of Three Bulls

TC Reds – Ringle, WI

Grand Champion

Pen of Three Females

Holton Cattle Co. – Cisco, TX

Reserve Grand Champion

Pen of Three Females

Newt Hutchison – Canton, OK

For questions about Red Angus shows, contact Erin Dorsey, RAAA show coordinator, at erin@redangus.org. //

Red Angus Association

2023 SERAA Grasstime Show, Banquet, Donation Semen Auction & Annual SERAA Meeting

Friday March 31, 2023 beginning at 4:00 p.m.

County Agricultural Trade Center 17465 US Hwy 31, Cullman, Alabama

Saturday, April 1, 2023

Noon Central Time

Co. Rd. 1339, Cullman Stockyard – Cullman, Alabama

Sale Chairman: Jimmy Whitley 205/359-0154

Auctioneer: Kyle Gilchrist -- AL Auctioneer License #1206