Tim Penny: Keeping your farmland in production after retirement and beyond
Published 5:51 pm Friday, May 27, 2022
As any farming family can attest, every farm has its own special history. The small farm that I was raised on outside of Kiester is no exception. Our lives were rooted in the connection between land and community. Because of these important ties to the land, it concerns me that the average farmer is close to retirement age, and that not everyone has an heir to transfer the land to when the time comes. Fortunately, Southern Minnesota Initiative Foundation (SMIF) has a program that can help farmers safeguard the legacy of their land while simultaneously giving back to their communities.
In southwest Minnesota, Neil and Jenna Kruse wanted to make sure that their family farm will be maintained as farmland after retirement. With help from their estate planning attorney they created a plan that will keep the family’s 145 acres in production after they’re gone. Rental income from the farmland will support nonprofits that have been important in their lives, including a program that supports agriculture education in Minnesota public schools.
Neil and Jenna’s story is just one example of how a farmland donation has benefited the landowner and positively impacted their surrounding community for years to come. SMIF’s Acres for Good program allows farm families like Neil and Jenna to donate their land as a charitable gift. What makes this model unique is that rather than liquidate the asset as most charities do, SMIF retains the land and keeps it in production by a rental arrangement. This allows retiring farmers the peace of mind that their land will continue to be farmed. The landowner receives a tax deduction and bypasses capital gains tax while still being able to maintain a stable revenue source for life.
As the name suggests, the Acres for Good program is also a way to do good things for your community. The income stream from the land is used to support southern Minnesota communities well into the future. With more than $7 billion of wealth in SMIF’s region expected to transfer by 2030, this program can help retain that wealth locally while creating a unique opportunity for farmers to make a long-lasting impact on rural Minnesota.
Farmers will choose how they want to allocate their gift of land through this program. It can go toward one of SMIF’s 30 Community Foundations which invest in their communities through grants and programs. For a region-wide reach, farmers can allocate their land toward SMIF’s general endowment, or SMIF’s specific funds which support youth and entrepreneurs in the region. Farmers can even set up a Donor Advised Fund to allocate resources to their specific interests and values such as their place of worship, alma mater or local charity. We will work with farmers to make the process as simple as possible.
If you know a farmer who is thinking about retirement or estate planning, please let them know that there is a way their land can remain active farmland and provide them with a steady revenue stream, while in the long-term also benefiting the communities and causes they care about most. This is gifting with a purpose at its best – and SMIF is here to help.
To learn more about the Acres for Good program visit smifoundation.org/acresforgood or contact Alissa Oeltjenbruns, Philanthropy Officer, at 507-214-7023 or email@example.com.
As always, I welcome your comments and questions. You can reach me at firstname.lastname@example.org or 507-455-3215.