Released Sept. 14, 2007
COLLEGE PARK, Md. - What happens to farms when farmers are ready to retire or nearing the end of their lives? If they have children, they pass the land onto the next generation. Simple, right? Well, not so simple, actually.
According to Wes Musser and Lori Lynch, a lack of communication in farm families is common. “Sometimes,” says Musser, a professor in Agricultural and Resource Economics (AREC), “families break up over the transfer of the farm.” For instance, says Musser, also a specialist in farm management for University of Maryland Cooperative Extension, “how does a cash-strapped farmer bequeath his only asset to his children if one or more of them isn’t interested in running the farm?”
“What farmers don’t think of,” says Lynch, an AREC associate professor and Extension specialist in land policy, “is the transfer of the business operation.” This lack of planning can result in the sale of the land to development, a result often harmful to the environment.
To encourage farm families to deal with issues of succession, Musser and Lynch organize and help conduct farm estate planning workshops. A big problem farmers face is paying taxes on land that over the years has greatly appreciated in commercial value. The estimated market value of land and buildings per acre in Maryland is the fifth highest in the country.
The free workshops educate farmers about tax-saving options available to them, such as conservation easements. Or the option of agreeing to farm the land for the 10 following years, and having the land assessed at its agricultural value instead of its market value. The goal is providing farmers with planning tools that will prevent them from having to sell their land because they can no longer afford to own it.
--30--
http://www.agnr.umd.edu/news/article.cfm?id=04486d900a5a5a8f005d75547d1e763e
Contact: Virginia Gerhart, vgerhart@umd.edu
