American Family Farmland: Preserving Values and Creating Wealth by Johnny Klemme
Sometimes family farms are passed down to the next generation without a hitch.
Other times, though, things get ugly. Farmland advisor and author Johnny Klemme tells the story about two brothers who farmed together and had a plan in their minds about what would happen after they were gone, but they never wrote anything down. One of the brothers died unexpectedly, and his daughter inherited his portion of the farm. She immediately filed a partition suit and forced the sale of their 150-year-old family farm, because none of the other family members had enough cash to buy her out.
With land prices far exceeding productive capacity in many areas these days, the pressure to sell can be immense — even if in some cases the attachment surpasses monetary value. A corporation recently proposed buying a family farm in Kentucky for $2 million. Grandpa said no. They offered $4 million. Still no. $8 million. No. “Then what’s the price?” they asked. “It’s priceless,” he said. “You can’t put a price on my time with my family and my grandkids and the memories we’re making here.”
Eventually, though, all farms do pass hands. This is often a huge, once-in-a-generation event that is extremely emotional for all involved. What should happen when grandma and grandpa die and there are several children, each of whom is in a different stage of life, has different desires for what happens to the land, and is more or less attached to the place they grew up?
American Family Farmland by Johnny Klemme seeks to address the multitude of concerns and decisions a family faces in a situation like this. Through stories and plain talk, Klemme helps family members think through all the options in this complex situation.
One of Klemme’s most important messages — as simple and obvious as this sounds — is that families that start the planning process early have more successful successions. When children who want to farm know from the beginning of their careers that their parents and grandparents have prepared a path for them to take ownership of the farm, it gives them the confidence they need to invest their time and energy. Children who don’t want to farm know that they’ll get a fair inheritance as well.
Klemme walks readers through both the intangibles — how to determine what your goals really are, how to relate to family members who feel differently — and the complex financial and legal options available these days: 1031 tax-deferred exchanges, land trusts, conservation easements, and many more. While there’s no specific regenerative or ecological focus to the book, Klemme does address the concerns many people have that the land their family owns not be degraded by future owners.
This book succeeds in demonstrating that with good planning, farm succession can be a winning situation for everyone.
