Gifts of farmland

If you want to provide an immediate benefit to the University, you can give your farm outright. By giving a farm that has appreciated in value and that you have held for more than one year, you can avoid paying capital gains tax on the appreciation. You can also receive an income tax deduction for the fair market value of the farm (subject to applicable limitations). An outright gift of a farm must be approved by UMF’s gift acceptance committee, and the farm must have a value of at least $100,000.

If you want to give your farm to the U but you’d like to maintain control and use of the farm during your life, you can give it to the University through your will or trust. To do this, you can include a provision in your will or trust giving the farm (or the proceeds from the sale of the farm) to UMF using the following sample language: “I give [description of property] to the University of Minnesota Foundation, Minneapolis, Minnesota, to be used [for the benefit of the college, campus, or program] or [according to my written instructions on file with the foundation].” The Planned Giving staff at UMF can work with you and your attorney to customize this language to ensure that it accurately reflects your wishes and that the University will be able to use the gift as intended.

Under Minnesota law, you can give your farm to UMF without the need for probate, through a transfer on death deed. When the owner passes away, the farm transfers directly to the foundation. This deed must be filed during the owner’s life in the county where the farm is located and may be revoked at any time during the owner’s life. This option is available in many, but not all, states.

A charitable remainder trust is an excellent gift option if you wish to support the University while retaining income for yourself or others. Using this type of trust, you can convert your farm into a higher income-producing asset. By transferring the farm to a trust, you receive an immediate income tax deduction and avoid paying upfront capital gains tax when the trust sells the farm. The trust payments begin after the farm is sold and the proceeds have been invested in a diversified portfolio. At the end of the trust term, the remaining assets in the trust go to support the University and other charities you’ve designated. UMF can serve as trustee if it is irrevocably designated to receive at least 50 percent of the remainder and the value of the gift for the University is at least $100,000 at the time the trust is funded.

With a retained life estate, you can give your farm to UMF now and maintain control of the farm for as long as you wish—either for life or until you sell the property. You receive an immediate charitable income tax deduction, subject to applicable limitations, based on the current value of the future gift.   For a retained life estate to the University, the farm must have a value of at least $250,000 and the donor pays all maintenance, taxes, and insurance on the farm during their lifetime. A retained life estate agreement is irrevocable and requires the approval of UMF’s gift acceptance committee.