From The Westerner Blog
Winds were gusting over 45 miles per hour on an overcast day at the Dunmire Ranch in southeastern Wyoming. Black cows grazed in the distance with wind turbines lined up on the horizon.
At the center of ranch, young colts milled around the corral. Gator, a 14-year-old blind and deaf dog, barked, guarding the home of rancher Les Dunmire. Inside the house, Dunmire put on his dirt-caked cowboy hat and boots, as he told me how he’s owned this ranch for just over 30 years and that this lifestyle goes back generations.
“My dad had a ranch in Iron Mountain Wyoming and my granddad had a ranch in Sioux County, Nebraska,” Dunmire said. Back when he started in 1987, Dunmire only had a few hundred head of cattle. Now, he owns over 100,000 acres and 1800 head of cattle. But at 66, Dunmire is starting to take a step back from it all.
“I always tell people that I’m going to work as long as I can and then become a burden for my children,” Dunmire said,”but seriously, as we get older we do a little less. As we get older, we transfer more of the day-to-day operations of the ranch to our children.”
Dunmire said he sees passing on lands as the last responsibility of a rancher.
“We’re trying to get it to the next generation, or the next two generations, intact with the smallest amount of tax pain that we could possibly have,” Dunmire said.
He’s been preparing for succession now for 26 years. It’s required an accountant and lawyer to figure out the best way to keep his kids from drowning in estate taxes. One strategy has been to divide the land into six legal entities.
To put the situation in context, Dunmire recounted the story of how his dad came into his ranch. It also serves as a worst-case scenario of poor estate planning.
“There was kids that wanted to stay there, but when the grandfather passed away he had not done any estate planning or gifting or anything to get ready to pass it on. And they had to sell the ranch, basically, because of [the] tax situation,” Dunmire said.
He’s far from the only one going through this process. In 2012, the average age of farmers and ranchers hit a record high of 58 years old. According to a report from the National Young Farmers Coalition, 63 percent of farms are on the verge of transitioning. Experts say the US needs to be prepared for a massive land transfer in the next decade.
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