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Seven Concerns for Heirless Land Planning

Seven Concerns for Heirless Land Planning


By Scout Nelson

Planning a farm or ranch transition without a family heir can be challenging. Without a successor, landowners face deeper emotional and financial concerns. Addressing seven common issues can guide succession choices.

Retirement Planning: Many producers continue working indefinitely, but unexpected health issues often force early retirement. Without savings, selling or leasing land or equipment might be the only income source available.

Long-Term Care: With average care costs around $10,000 per month, planning is crucial. Options include long-term care insurance, self-payment, or qualifying for Medicaid, which has strict asset rules and a five-year lookback.

Capital Gains Tax: Selling land or appreciated assets during life may trigger high taxes. Passing assets at death allows a step-up in basis, reducing capital gains liabilities.

Depreciation Recapture: Selling equipment may lead to depreciation recapture taxes. If the sale price exceeds its tax basis, the difference is taxed as ordinary income, which can be costly if unplanned.

Probate: Probate is the process of re-titling assets under a will. It can be expensive and public. Tools like trusts, TOD designations, or life-estate deeds help avoid probate but may not avoid public records in some states.

Federal Estate Tax: In 2025, estates over $13.99 million face a 40% tax. The limit could change, and some gifted assets are still taxed. Strategies include exclusion gifts and spousal transfers.

Nebraska Inheritance Tax: This tax depends on inheritance size and the heir’s relationship. It is difficult to avoid and applies regardless of federal estate tax status.It’s also important to consider personal factors like remarriage, addiction, or disability among heirs. Every plan must weigh financial goals with personal values. “What outcomes are unacceptable to you?” is a key question to start planning.

Photo Credit:istock-alenamozhjer

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