Document Type

Thesis - Open Access

Award Date

2016

Degree Name

Master of Science (MS)

Department

Economics

First Advisor

Eluned Jones

Keywords

estate planning, family attitudes, family farm, farm estate, farm heirs, transition planning

Abstract

Estate planning and intergenerational farm transitions are the focus of research and extension programs across the nation due to the potential tax consequences faced by farm operations, retirement funding options available and utilized by farmers, changes in asset transition tools available, and communication (or lack of communication) issues related to bringing an heir back to the family operation.
Past plans for research projects and extension programming developed across the nation and in South Dakota (SD), were created with many assumptions regarding the attitudes of farm family members towards the transition of ownership of the operational assets and personal assets of the landowner generation, and towards the transition of workload or labor and management responsibilities. However, no one had asked the family members about these attitudes.
This research seeks to identify these attitudes. The research analysis is based on primary data from an online survey of South Dakota farm family members. These members were categorized as the landowner generation (current owner of the operational assets), returning to the operation heir (on-farm heir), off-farm heir (heir that has a career and, or, family not actively involved with the farm operation), spouse of the on-farm heir, and spouse of the off-farm heir.
The survey included two sections: estate planning and transition planning. Statements elicited information used to analyze prior assumptions.
The survey targeted participants from past extension workshops via email invitations, and solicited participation via press releases posted on www.igrow.org and published in statewide media. Attorneys and insurance agents delivered additional invitations to an unknown number of individuals with farm estate planning experience. Sixty-five respondents completed the survey. There were an insufficient number of responses to the survey from the spouses of either category to be included in the analysis.
Survey results were analyzed regarding the validity of maintained assumptions regarding specified aspect of estate planning and transition of a farm family operation.
Of the ten assumptions proposed the results of the analysis failed to reject six of the assumptions (at levels of statistical significance p

  1. Perceptions about the quality of communication within families differ by category.
  2. The landowner generation has found determining how to pass on personal and farm assets to be a difficult task.
  3. Farm families need more information and knowledge to create or finish their estate plans.
  4. Farm families have found it difficult to find and utilize industry professionals.
  5. The landowner generation and heirs have similar attitudes toward transitioning workload or labor responsibilities.
  6. The landowner generation and heirs have similar attitudes toward transitioning ownership of minor assets.

These results support the content of currently offered estate planning and transition planning conferences for farm family operations. Farm families need methods they can use to communicate effectively about the estate planning goals for the operation and the drafting of plans to accomplish those goals. They also need assistance in learning about estate planning tools, and in finding industry professionals to assist in implementation. Survey data analysis indicates that there needs to be an increase in the quality of communication between landowner and off-farm heirs. Many of the perceptions regarding an understanding about the value of the assets being distributed, and understanding about the plans being implemented indicated a different level of response from the landowner generation and the on-farm heirs. This is particularly evident in the distribution of assets. The results associated with transitioning management to the next generation indicated a disconnection between the heirs and the landowner generation with respect to labor and management.
The survey data analysis highlights specific areas that need additional focus in creating educational programs, although a majority of the individuals responding to the survey indicated that they have communicated with their families about their estate plan, as the study analysis indicates there is a difference in communicating about creating an estate plan and managing the implementation of the plan.

Library of Congress Subject Headings

Farmers -- South Dakota -- Attitudes

Rural families -- South Dakota -- Attitudes

Family farms -- South Dakota

Estate planning -- South Dakota

Inheritance and succession -- South Dakota

Family-owned business enterprises -- Succession -- South Dakota

Description

Includes bibliographical references (pages 121-123)

Format

application/pdf

Number of Pages

160

Publisher

South Dakota State University

Rights

Copyright © 2016 Heather Gessner

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