State Farm Car Policy Booklet - Nevada Division of Insurance
Farm Asset Transfers in Estate Planning in Nevada
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Transcript of Farm Asset Transfers in Estate Planning in Nevada
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 1
FARM ASSET TRANSFERS
IN ESTATE PLANNING
IN NEVADA “Owning a family business requires a business succession plan
if you want the business to continueon after your
retirement or death.”
BRADLEY B. ANDERSON RENO NEVADA ESTATE PLANNING ATTORNEY
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 2
Owning a family business requires a business succession plan if you want the
business to continueon after your retirement or death. Important aspects of
your business must be addressed, such as, who will take over management of
the business and how will ownership be transferred. If your business is a farm,
then these issues become much more complicated. Farm asset transfers are a
critical part of succession planning and must be handled by someone very
familiar with the farming industry.
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 3
FARM SUCCESSION PLANNING MEANS MORE THAN JUST
TRANSFERRING OWNERSHIP
Farms are very unique businesses that involve very unique assets. Consider all
of the “moving parts” of your farming enterprise. Not only do you have a
substantial amount of land, but you also have specialized machinery and
livestock that make up a significant part of your farming business. Each of these
types of assets must be handled properly to ensure that your farming business
survives the succession from one generation to the next.
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 4
THE IMPORTANCE OF TAX PLANNING
Reducing estate taxes is a principal goal of the tax planning component of a
business succession plan. There are many tax strategies of which you can take
advantage, as long as you plan ahead. Allowing an estate planning attorney to
advise you in this area will be a great benefit. But, start planning early. If it is
your goal to keep your family farm productive and growing from generations to
come, your succession plan must be established early on. Knowing how to
transfer the most important components of your farming business is key.
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 5
TRANSFERRING FARM LAND
There are basically three ways you can transfer your farmland to the next
generation: sale, gift, or inheritance. Each method has its own advantages and
disadvantages. Many people assume that selling the property to the next
generation will reduce
estate and inheritance
taxes, but that is not
always the case. This
option should be discussed
with your estate planning
attorney to determine the
benefits in your particular
situation. However, if you
choose to sell the land, and
cash flow is an issue for
either you or your children,
an installment sale is always an option.
TRANSFERRING LAND BY GIFT OR INHERITANCE
You can also gift the land to your children, thereby taking advantage of your
annual gift tax exclusion. Just remember that gifting the property does not
create any income for you. Simply leaving the property to your children, through
your will or some other estate planning device, will allow you to continue to use
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 6
the property and receive its income throughout your retirement. A major
drawback is that the taxes that will ultimately be assessed on the property will
likely be significant.
TRANSFERRING FARMING MACHINERY AND EQUIPMENT
Much like farmland, transferring machinery and equipment can be accomplished
in several ways, depending on the needs of the parties. The equipment can be
sold outright or through an installment agreement.It can be part of the sale of
the business entity that owns the farm or priced out a little at a time.
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 7
SELLING YOUR FARMING MACHINERY TO THE NEXT
GENERATION
Cash flow is often a major issue when it comes to transferring a business,
including a farm. If you are considering selling your machinery and equipment,
as a method of transferring ownership, you must consider cash flow needs as
well. There will also be tax consequences to the seller, which should be
considered. Installment plans are often helpful in relieving cash flow problems
for the next generation. Another option is to sell the equipment piece by piece,
thereby spreading the tax consequences over several years. Gifting the
machinery and equipment is also another option, as long as you consider the gift
tax implications.
TRANSFERRING BREEDING LIVESTOCK
There are some common practices utilized when transferring ownership of
livestock to the next generation. With livestock used for breeding, you may
choose to sell a portion of the herd at a time, while retaining ownership of the
remainder. Another way to do it is by retaining ownership of the breeding herd,
but giving joint ownership of the offspring to the next generation.
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 8
TRANSFERRING FEED AND MARKET LIVESTOCK
If you have feed or market livestock, they are typically transferred in a different
manner. One of the most common methods is to transfer ownership of the herd
at the low point of the feed inventory. Another common method is transferring
ownership during the sale and replacement of the livestock.
If you have questions regarding transferring farm assets, or any other business
planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by
calling us at (775) 823-9455.
Farm Asset Transfers in Estate Planning in Nevada www.wealth-counselors.com 9
About the Author
BradleyB. Anderson
Prior to founding his own firm in 1995, Mr. Anderson served as a
senior counsel for two major financial institutions and witnessed
the often devastating effects of ineffective estate planning with
many customers of those institutions. When he eventually decided
to venture out on his own, this experience led him to focus
exclusively on estate planning, providing his clients with a full
range of basic and advanced planning options.
Mr. Anderson began his professional life as a teacher of mentally-challenged, visually impaired
students. After four years as a special education teacher, Mr. Anderson returned to school to
obtain his law degree and begin a second career. Upon finishing law school, he went to work
for a civil litigation firm, spending five years handling litigation, probate and wills work. He
then moved on to Wells Fargo Credit Corporation where he served as senior counsel. In 1990
he accepted a position with the First Interstate Bank Legal Division, where he had
responsibility for several divisions, including the Trust Department. In 1995, he began his own
practice as Bradley B Anderson, Attorney at Law. The firm has continued to grow into the
premier estate planning law firm we see today.
Anderson, Dorn, & Rader, Ltd.
Legacy and Wealth Planning Attorneys 500 Damonte Ranch Parkway Suite 860
Reno, NV 89521 Phone: (775) 823-9455
Fax: (775) 823-9456