AMARILLO – While tax laws may have made it easier to pass the farm from one generation to the next, changing times have some families looking at the end of a way of life, according to a 30-year veteran of agricultural estate planning.
Dr. Wayne Hayenga, professor emeritus and Texas A&M AgriLife Extension Service specialist from College Station, has traveled throughout Texas for three decades trying to help people pass their agricultural estates on to the next generation.
Hayenga was in the High Plains recently for seven farm and ranch estate planning workshops which attracted about 300 people, most with the same goal in mind.
“Every time there are changes to the tax laws, we see more demand for these workshops,” he said. “But the people basically just want to figure out how to keep the business going for one or two of the children and make sure all the rest are still taken care of.”
Hayenga said estate tax laws have made that easier over the years. Forty years ago, a person could only pass on $60,000 worth of property tax free and now that’s up to $5.3 million. Also, even if the property increased in value either because of inflation or demand, he said, “we don’t have to pay any capital gains tax on it now when someone dies.”
However, the continually changing tax laws and the dynamics of the agriculture industry itself are making estate planning anything but a one-size-fits-all deal, said the agricultural economist and attorney.
“Thirty years ago, I could throw something out to 10 farmers that seven or more of them would understand and be able to utilize. Now as farming operations have gotten bigger and different, if you have the same 10 farmers, I could throw out something and maybe only three have the business design that could utilize that idea. The other seven we have to come up with a different plan.”
Hayenga likened it to the medical world. “When I was a kid we had the family doctor and he took care of you from your scalp to your toenails. Today we have the eye doctor, throat doctor, heart doctor, diabetes doctor, foot doctor and dermatologist. Everything is specialized these days.”
And just as the operations have changed, so have the families. More often there may be no one interested in running the family farm, he said.