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University of Minnesota Extension

Gifting farm assets

Quick facts

Gifting of assets to the entering generation can be a valuable tool in the transfer process. Gifting can be used to:

  • Help reduce a taxable estate.
  • Transfer income tax obligations to children who may be in a lower tax bracket.
  • Help get the next generation established.
  • Gifts are always valued at fair market value (FMV) at the time of the gift.

Tax provisions


Different gifts


Can you afford it?

Does gifting violate your goals? Gifting can be a very useful transfer and estate planning tool. But don't do it unless you can afford to give up the assets. Once an asset is gifted away you have no control of it and can expect no income stream from it.

If gifting jeopardizes your financial security or violates your farm transfer and estate planning goals, you might want to reconsider the strategy.

Caution: Medicaid

Gifting assets can cause eligibility issues if you are considering applying for Medicaid for long-term health care costs. In Minnesota, gifted assets are generally only protected from Medicaid/Medical Assistance (MA) spend-down calculation and long-term care costs IF 60 months have passed before the individual applies for MA. See an elder law attorney for help.

Caution: This publication is offered as educational information. It does not offer legal advice. If you have questions on this information, contact an attorney.

Authors: David Bau and C. Robert Holcomb, Extension educators, Megan Roberts and Gary Hachfeld

Reviewed in 2023

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