As long as the federal estate tax exemption sat at a record high, Joe and Jackie Trudeau were confident they had enough wiggle room to use educated estimates for valuing their family farm in southeast South Dakota.
But land values have increased significantly since Joe retired more than a decade ago. And next year, the amount that a married couple can pass tax free to heirs could dramatically change if Congress allows the current estate and gift tax to sunset.
Attorneys advised the Trudeaus to update their transition plan based on a professional appraisal. The couple and their six children needed to prepare for the potential new tax environment with a clear understanding of the operation’s value. The Trudeaus’ goal is to transfer their farming operation to the next generation without a significant tax burden.
Selecting an appraiser was straightforward, the Trudeaus said. They have worked with Farm Credit Services of America (FCSAmerica) since the early 1970s, so they asked their financial officer Austin Luecke to connect them with the FCSAmerica appraiser for their local market.
“I figured I should go with an appraiser who had a farm background,” Joe said. “I wanted something credible, and the attorneys wanted us to have an appraiser who was really legit.”
Joe worked with appraiser Jesse Ball, who has more than 15 years of experience valuing properties in the area. FCSAmerica offers customized appraisals to customers for a fee to support their business goals, including the buying and selling of property and estate or business planning. The financial cooperative has a team of general certified appraisers that pairs FCSAmerica’s knowledge of agriculture with expertise in the local real estate market.
“We are very pleased to offer our customers the benefit of having access to our in-house appraisal team from a lender that already understands their operation.”
The Trudeaus’ operation includes ground that originally belonged to Joe’s great-grandfather. Over the years, the family bought additional land and made improvements, such as adding irrigation and removing buildings.
Today, Joe and Jackie’s three sons run the farm. Their entire family, including three daughters and 18 grandchildren, live within 10 miles of each other. All the siblings have been involved in planning for future of the farm.
As part of the appraisal, the Trudeaus provided legal documents detailing ownership and property lines, after which Ball collected information on the ground’s productivity and had conversations with the family about improvements, areas that pose challenges, maintenance on the properties – all the factors that ultimately shaped the final valuation.
“From the farm inspection to the completion of the report, the timeframe was maybe three or four weeks,” Joe said. “I was very satisfied with the way it moved.”
The family, he said, is now confident that “we can back up every number and the reason the appraisal came out the way it did.”
An appraisal is an opinion of market value on a specific effective date, completed by a state certified appraiser. Appraisers are non-biased parties who rely on sales and market data to arrive at a value conclusion.
Appraisers at FCSAmerica understand the unique aspects of agriculture. They have the knowledge and experience to value property and assets to meet a customer’s financial needs.
Our valuation process uses industry-leading software that translates into quick turnaround times.
