Estate planning courses on offer
Experts to explain how farmers can reduce tax burden
By JOHN O'CONNELL
MALTA, Idaho -- Jeff Johnson has a difficult balance to strike as he commences estate planning for his farm.
A son and daughter have expressed interest in farming, and he hopes to leave them enough to maintain a viable operation. But he doesn't want to shortchange his other children.
Johnson, 54, is among the many producers in Magic Valley and eastern Idaho seeking solutions to farm succession dilemmas in University of Idaho Extension classes offered throughout the region.
The Malta grower and more than 20 other farmers have enrolled in a course that meets each Wednesday from Feb. 27 through March 20 at the Zions Bank building in Burley. Thirty growers are participating in a four-week course scheduled each Thursday from Feb. 28-March 21 at the Bonneville County Extension office, 2925 Rollandet, Idaho Falls.
At the request of eastern Idaho dairy producers, a third class has been scheduled for a single day from 10 a.m. to 3 p.m. March 11 at the Franklin County Extension office, 561 W. Oneida St., Preston. The cost of the day-long class, which will be facilitated by regional extension educators, is $20.
"It's become much more difficult to do estate planning with the rapid rise in real estate prices. What one can cash flow in farming versus what farmland is selling for now are two different things," Johnson said, adding he's striving to come up with a plan that's fair, if not necessarily equal.
Jacob Catmull, a certified public accountant with Evans & Poulsen in Burley recruited to help with the Burley class, explained inheritance tax law allows an estate and gift tax exemption of $5.25 million, or $10.5 million per couple, to offset assets in the gross estate.
Catmull advises producers who believe the fair market value of their assets may exceed the cap to consider annual gifts, allowed up to $14,000 per recipient from each spouse. He cautioned producers to be certain they have the wherewithal to make gifts, reminding them "the person receiving the gift has to have control over the asset."
Johnson and his wife have already begun making annual gifts to reduce their estate.
UI Extension dairy specialist Rick Norell said dairy producers on a southeast Idaho advisory committee suggested the shorter Preston class. He said estate planning is a hot topic within the industry, both due to the aging of the population and a "cost-price squeeze" that's led dairy producers to question their "long-run horizon."
Teton County Extension educator Ben Eborn, who will present in Preston, advises farm families to encourage children to work elsewhere for a few years to gain other work skills. He said UI has developed a skills assessment test farmers can administer to family members to determine strengths and where knowledge gaps may exist. UI also offers a personality test to help guide farmers in working with family throughout the estate planning process.
Eborn said the course also emphasizes the importance of compiling information about assets and developing a mission statement to start the conversation about the transition.