Cultivating Legacy

Jason Wagner knows the value of a family farm is more than its land. 

It’s forts in the hayloft. It’s fishing in the river and swimming in a cow tank. It’s the summers spent with only family for company. It’s lessons on hard work and resourcefulness. And it’s a family legacy. 

He works to preserve all of that in his farm-focused estate planning practice at Wagner Oehler in Rochester. “It’s just a sense of responsibility and putting the work in,” Wagner says. “So many of my clients are farmers. And as hard as I work, I know that they’re working harder.” 

Wagner’s own family farm was founded by a forebear in the 1850s. “They homesteaded it, put up a sod house, and then he went to fight in the Civil War and came back,” he says. 

More than a century later, Wagner grew up on a plot nearby with four brothers and sisters, helping his father—who still operates the farm to this day—with row crops and the farrow-to-finish hog operation. “It was always an excuse not to go to school if we were selling, loading up hogs that day,” he says. “We used to bale straw too, on square balers. Not many people do it that way anymore, I don’t know if anyone really does. But I’d stack them up in the wagon pulled behind the tractor. On some of those days, I was praying for rain so we didn’t have to do it.” 

After growing up and moving off the farm, Wagner was looking for a career that was more than a 9-to-5 job. “Something that held to some of that legacy and building something that would hopefully be long-standing.” 

His current practice was inspired by a one-off comment someone made as he was helping his grandfather unload grain and move augers. “The guy at the co-op said, ‘Hey, maybe you should do farm law and help your grandpa figure out what he’s going to do with his farm,’” Wagner remembers. “And it just clicked.” 

One of the biggest pieces of any farm family’s succession plan is the real estate. “These are people who have most of their wealth tied up into real estate. They’ll bring you a balance sheet and 70% to 90% of everything on it is just going to be real estate,” he says. 

Minnesota has complex laws governing such real estate. “We have to cross-check our plans to make sure that we’re not running afoul of corporate farm law, making sure we’re staying in compliance with ag homestead rules.” The average farm, being over 400 acres and pricing around $10,000 an acre, is also subject to estate tax. “We’re spending a lot of time in workshops and training where they’re talking about much larger estates, and we have to shrink that down and apply it to our 400-acre farm,” Wagner says. 

As with any estate planning practice, emotions and family relationships often come into play. And paths differ depending on if the family farm has an heir. “I’ve had clients in their 80s that are still actively farming, they’re still trying to grow, and there’s nobody coming after them,” he says. “You have to push on some questions a little bit and touch some sore spots.” 

Wagner most enjoys working with farms that are being passed down to the next generation. “There’s a ton of headwinds against that, and farms keep getting bigger,” he says. “We have to have a good plan to get it to the next generation.” Without one, farms can fail within months. 

To avoid that, Wagner looks at how the current operation is held, including land, equipment, machinery and livestock. He often uses lifetime transfers, such as gifting and selling, to pass pieces of the assets on to the next generation. The land itself needs a longer-term plan, usually requiring trusts or land partnership. This way, the success of the farm isn’t left to just an estate plan. “Farm succession never stops, is what we say. It could be a 10-, 20-year plan, but it’s always got to keep moving forward,” he says. 

Wagner recently worked with a client who opted to gift the farm to his son immediately. “His son didn’t know about it until he’s there. And dad’s telling him how much work the son has put into the farm and how it’s increased the value so much and how he has so much sweat equity that he’s decided to just sell him the farm for his sweat equity,” Wanger remembers. “And so dad’s holding back tears and his son is just floored. That day, literally, the deed to the farm passed across the table from generation five to generation six. 

“We like to play a part in that story.” 

Wagner is continuing his part in his own family’s farming legacy. He, his wife and children now live on a 15-acre hobby farm where they raise chickens and a few sheep. “I definitely latch on to the idea of legacy,” Wagner says. “But I think it’s important for all clients and people to understand that legacy doesn’t just have to be tied to the land. It can be the values you pass on.”