Conferences
Understanding Farm Succession, Existing Tax Policies and Aligning Family Goals
Mallie Medlock
Summary
Farm succession planning can reduce financial, legal, and human risks. 95% (2022 Ag Census) agricultural operations are family-owned, which may lead to stressful discussions about finances, death, and succession. Only 30% of farms survive to the second generation and 10% to the third generation. Open communication between family members to develop a succession plan may alleviate some risks and increasing success.
Another barrier to farm survival is local and federal regulations. The Tax Cuts and Jobs Act (TCJA) of 2017 changed the gift and estate tax exclusion limitations. For 2025, the lifetime exclusion of federal estate and gift tax is $13.99 million per person, which will significantly decrease beginning in 2026 unless Congress takes action. These changes will substantially increase the number of taxable farm estates affected, leading to an estimated $1.2 billion in total federal estate taxes for all taxable farm estates.
Many succession planning tools exist; however, extension programs must emphasize how local and federal tax policies align with family succession goals. Programming and extension tools should continue to align farmer and family goals but remain flexible to handle changing tax laws.
The goal is to describe current tax law and future educational efforts for farms to manage associated succession risk(s) and to increase transition survival rates. This educational effort aims to discuss strategies and expectations to increase succession/transition survival, increase knowledge of succession planning tax laws and improve mental health through open discussion of succession plans.
Details
| Conference | 2025 Extension Risk Management Education National Conference |
| Presentation Type | 30-minute Concurrent |