As farmers get older, the issue of farm transfer takes on increasing importance. While a small minority may describe plans to "work until I drop and let someone else worry about it," most farmers recognize the need for, and benefits of, proactive planning. Generally, there are several viable options to consider, each with its advantages and disadvantages.
A variety of factors impact farm transfer decisions including income and estate taxes, current economic conditions (e.g., interest by developers in farmland), availability of family members to continue farming, a farm owner's desire to continue working, and a farm owner's need for a regular income stream, to name just a few.
Among the options that farmers may have for farm transfer are:
- Selling farmland to a family member
- Selling farmland to another farmer
- Selling farmland to a developer or other commercial entity
- Selling shares in a family farm corporation
- Gifting farm assets to family members in accordance with federal gift tax rules
- Renting farmland to a family member
- Renting farmland to another farmer
- Grooming someone outside the family to take over the farm
- Selling the development rights and then transferring the farm
Use the Farm Transfer Brainstorming Worksheet to identify the advantages and disadvantages, for you, of at least three farm transfer options.
Farm Transfer Brainstorming Worksheet
Sell farmland to a family member
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Sell farmland to another farmer
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Sell farmland to a developer or other commercial entity
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Sell shares in a family farm corporation
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gift farm assets to family members in accordance with federal gift tax rules
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Rent farmland to a family member
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Rent farmland to another farmer
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Groom someone outside the family to take over the farm
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Sell the development rights and then transfer the farm
| Advantages |
Disadvantages |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Online Resources
