Producers should develop a plan for an estate transfer

Jon T. Biermacher, NDSU Extension Livestock Development Specialist | September 2026

Making decisions concerning the transfer of assets in one’s estate is very difficult and can be the most procrastinated activity for all of mankind. Many do not want to talk about the inevitable, nor do they want to decide who among their family, friends and favorite charities will receive the money, property, and other assets that have taken a lifetime to amass. As a result, the proverbial can is often kicked down the road in hopes that something magical will happen to resolve this difficult task. And oftentimes, the lack of planning can lead to expensive legal issues, unwanted tax implications and, sadly, ugly family disputes and feuds.

Several things are required to develop the plan once the estate planning process begins. The first is effective communication. When a married couple holds joint tenancy ownership of assets, they must decide who gets what and how much. Without good communication, a number of issues can arise. Of course, having only one heir will drastically reduce the potential problems and discussion time, but oftentimes, there is more than one. In addition to leaving part of the estate to an heir, in many cases, one or both spouses have a desire to leave part of their estate to one or more charitable organizations. Transferring ownership of assets, especially land, and possibly a few other items (such as equipment and/or livestock) to multiple heirs in undivided interests should be given considerable thought and scrutiny. Undivided interests can be used favorably in such things as mineral interest, but the chance of long-term happiness for owners of undivided interests, especially land, is typically not high.

Another level of complexity in the process arises when someone says, “I do not want you to ever sell such and such asset,” resulting in a burden to the heir(s) rather than a blessing. It gets even more complicated when an entire business is being transferred rather than only assets. So, when the decisions are numerous and complex and involve multiple heirs, a high level of effective communication with all parties can increase the chances for a blessing rather than a burden. To repeat: Communication among all relevant parties cannot be overstated — it is important in every stage of the estate planning process.

After the owners determine who gets what assets in the estate, the next step is to choose an instrument(s) to transfer the estate’s assets to the heirs and desired charitable institutions. There are a number of instruments that can be used, each with varying levels of complexity and cost. However, two of the most common instruments are wills and trusts, and each has its trade-offs. Creating a trust, especially a complex trust, is usually more expensive because it often requires changing titles and deeds to facilitate moving the ownership of the assets to the trust. However, if these activities are not completed, the trust will provide little if any value. With trusts, more of the financial assets are paid during the planning process and less at the time of estate settlement.

In the case of planning using only a will, it is usually more economical on the front end of the process but tends to cost more later in the process if the estate requires court action during the settlement (probate) process.

Your best route is to seek out and hire legal counsel who is knowledgeable and experienced in estate planning, especially someone with experience with agricultural estates. They will provide valuable insight into the different instruments available for transferring estate assets and help guide you through the proper and legal use of each. They can guide you through the planning process and ensure your goals are achieved through the proper design and creation of the necessary documents. Generally, other documents, in addition to those related to asset transfer, are recommended to provide guidance to family members concerning late-in-life healthcare and legal representation.

It is noteworthy to point out that the Working Families Tax Cuts Bill (PL:119-21), contained within the One Big Beautiful Bill Act passed into law in 2025, increased the size of an individual estate not subject to federal estate taxation from $12.92 million for 2023 to $15 million (i.e., $30 million for a married couple filing jointly) for 2026. The new legislation also retained the portability option for a married couple, which allowed the surviving spouse to use the unused portion of the deceased spouse’s exemption to add to their own exemption. Also, the amount of individual tax-exempt gifts was increased to $19,000 per gift in 2026 from $17,000 per gift in 2023. Proper filing of IRS Form 706 is required for the unused portion to be available to the surviving spouse.

With the $30 million exemption for a married couple, one might conclude there is little need to plan, since no federal estate tax will be due. This way of thinking is cautioned because the questions of who gets what and how much still remain. Unlike the previous estate tax legislation, the current law is permanent and therefore not scheduled to expire.

A last point is that each of the 50 states has a plan for its residents who die without having developed a plan for their estates’ assets. If an individual or a couple wants to make those decisions, it is imperative that they communicate their wishes, seek out and hire competent counsel, and pay to create a plan.

Additional information about the new estate and gift tax legislation can be found at https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax.