OSU hosts gathering of farm transition planning professionals (2024)

The OSU Agricultural & Resource Law team just returned from Cincinnati after hosting the Second Annual Cultivating Connections Conference. What a thrill to bring together 121 professionals from across the country who work in farm transition planning! The group consisted of attorneys, tax professionals, educators, farm legacy counselors, financial planners, and law students. The commonality among our attendees: the desire to help farms transition their assets and operations to the next generation.

The old saying, “it takes a team,” rings true for farm transition planning. The conference illustrated the myriad of topics and expertise required to assemble a farm transition plan and the hurdles a farm family faces. Like the long line of hurdles that awaited our Olympic athletes in their races this week. But the difference is that farm families aren’t always trained to overcome those hurdles, let alone at a high speed. That’s where the professional team comes in—to help move a family over the hurdles it faces.

Here are a few takeaways on the “hurdle” topics we focused on at Cultivating Connections.

• Don’t jump right to the plan--talk first. An important first step to building a plan: get the family talking and thinking. David Marrison of OSU Extension recommended strategies for working with farm families, including understanding the legacy; encouraging the family to assess its strengths, weaknesses, opportunities and threats; and helping the family deal with the elephants in the room.
• Organize, organize, organize. A huge amount of information goes into a farm transition plan and organizing that information is a challenge. Kelly Moore of Make Hay Consulting demonstrated a new tool that can help, the FARMS spreadsheet, currently under development by OSU Extension.
• Know what’s in an appraisal. We use appraisals regularly in farm transition planning and estate administration, but do we understand what goes into an appraisal and what limitations it has? Tim Harpster, an appraiser with Consolidated Appraisal Services Company, answered those questions.
• Divorce is a threat to reckon with. But a well drafted pre-nuptial agreement can help reduce the impact a divorce can have on a farming operation, as Susan Montgomery of Gottlieb, Johnston, Beam, Dal Ponte PLL explained. Farm transition planners also need to understand the process of divorce and parenting plans, and how they can affect a farm family.
• Be careful with business entity discounting. Whether for “lack of marketability” or “lack of control,” business entity discounts can reduce the value of an estate and limit federal income tax exposure—but they need to survive IRS scrutiny. Peter Woodlock of Youngstown State highlighted issues with discounting.
• It’s time to think about the 2025 estate tax sunset. There are strategies to employ now to prepare high-wealth farms for the possible reduction of the federal estate tax exemption in 2025. David Malson of Barnes and Thornburg LLP walked us through a few of those strategies.
• We need to encourage and mentor more rural professionals. There's an alarming shortage of legal and tax experts who can advise farm owners and operators in rural areas. Beth Rumley of the National Agricultural Law Center led a panel of young attorneys--Johnny Cottingum of Wright & Moore, Eli Earich of Barrett, Easterday, Cunningham and Eselgroth, and Jennifer Harrington of Iowa State University--to discuss issues and solutions for reducing these "rural deserts."
• Know the ethics rules. When an attorney represents a farm couple, farm family, and/or farm operation, lack of awareness about potential issues with confidentiality and conflicts of interest can get an attorney in trouble. Jesse Richardson of West Virginia College of Law laid out the rules of professional responsibility that can affect farm transition planning.
• Plans can differ. The conference ended with a case study that challenged all to assess a family’s situation, its farm transition plan, and the administration of its estate and federal tax return. A range of ideas and analysis by conference attendees emerged. What we learned: there can be different paths to the same goal—different ways to jump the hurdles. But in all cases, it takes a team of professionals to get the family through those hurdles.

Learn more about the Cultivating Connections Conference on the Farm Office website. Consider joining us next year for the third annual conference, hosted by Iowa State University’s Center for Agricultural Law and Taxation, on August 4 and 5, 2025 in Ankeny, Iowa. And to stay involved with professionals involved in farm transition planning, consider joining the Association of Farm Transition Planners by signing up for the list serve.

Posted In: Estate and Transition Planning
Tags: Cultivating Connections, farm transition, Estate Planning, business planning farm succession