Securing the Future of Your Farm: Why Now Is a Crucial Time for Succession Planning in Texas

Taking advantage of new tax laws, legal tools, and early planning to pass your family farm to the next generation smoothly

When you’ve laid down roots, built your land, and raised a family around your farm, it’s natural to want that legacy preserved. At Preferred Properties of Texas, we believe in helping you do more than hold onto the land — we want to help you plan for its future. Call us today at 254-965-7775. Our slogan: “Land. Legacy. Life.”

What’s Changing & Why It Matters

Recent developments in federal tax law make this a good time for Texas farmers to revisit or begin succession planning:

• The One Big Beautiful Bill Act (OBBBA) permanently raises the federal estate and gift tax exemptions. Starting in 2026, each individual’s exemption will be $15 million (double for married couples), with yearly inflation adjustments. AgAmerica+2Farm Progress+2

• Bonus depreciation and Section 179 expensing rules have been expanded, giving more flexibility for deducting the cost of equipment or other farm investments. These changes can impact how you structure transfers and ownership. AgAmerica+1

• There are new opportunities (and considerations) for spreading out capital gains payments when selling qualified farmland to an active farmer, which can help reduce tax burdens. AgAmerica+1

Because of these shifts, decisions made now can yield real savings and simplify transitions later.

Key Steps to Take

Here are the important actions you and your family should consider to make your succession plan more effective and less stressful:

1. Set Clear Goals & Values

   • What is most important: keeping the farm in operation? Preserving heritage? Financial security for children who may or may not farm?

   • Decide together as a family what the priorities are.

2. Choose the Right Business Structure

   • LLCs, family limited partnerships, and corporations — they all offer different protections, tax outcomes, and control options. Depending on size and operation, one of these may help minimize taxes and liabilities.

   • Also, legal ownership, titles, deeds, and beneficiary designations all need to match up with what you plan. Inconsistencies can cause big problems down the line.

3. Understand & Use Tax Tools

   • With the higher estate & gift tax exemption, there may be room to make lifetime gifts or transfers without triggering taxes, or to spread out payments.

   • Review how depreciation and bonus expensing can help you now, especially if you’re investing in equipment or infrastructure.

   • Consider using trusts, life insurance, or buy-sell agreements to help ensure fairness and liquidity for heirs who may not be active in farming.

4. Identify & Prepare Your Successor(s)

   • Not every child or family member may want to farm. Make sure those who will inherit or operate are willing, trained, and prepared.

   • Think about succession timelines: perhaps start gradually shifting management before full ownership, giving successors hands-on experience.

5. Put It in Writing & Keep It Updated

   • Wills, trusts, deeds, contracts: make sure everything is legal, clear, and aligned with your goals.

   • Life changes (health, family circumstances, tax law changes) mean your plan should be reviewed every few years — ideally every 3-5 years, or sooner if big changes occur.

Common Pitfalls & How to Avoid Them

• Assuming that what your neighbor or another farm family does works for you. Every operation is unique.

• Neglecting fairness vs. equality: sometimes the farm heir who works the land will need more operational control, while non-farming heirs still deserve support.

• Overlooking “what ifs”: e.g. what happens if you can’t manage the farm due to illness; what if an heir leaves the business; what if land values or costs escalate suddenly.

Bottom Line: Why Acting Now Pays Off

Because of recent federal tax law changes — especially around estate and gift taxes — planning now can lock in advantages that might become harder to access in the future. The longer you wait, the more likely your plan will be hit by changes in law, courts, or family situations.

At Preferred Properties of Texas, we know Texas land, Texas agriculture, and Texas families. We’re here to help you protect more than acreage — to protect your legacy.

Contact Us
Preferred Properties of Texas
Phone: 254-965-7775

The Preferred Way to Buy and Sell Real Estate!