Support services we've provided for our attorney clients in the
past include, but are not limited to:
- How can you be in the television age of CSI: Crime Scene
Investigation without working the word "forensic" into the
conversation? Forensics apply to the appraisal industry, too.
There is a host of background information about any farm
available at courthouses, county engineer's offices, USDA
offices and on the World Wide Web, but you need to know where
to find it and how to use it. Did you know that the Mitchell
County Engineer's Office has an aerial photo of the entire
county as of 1976 that shows where nearly all of the drainage
tile lines were at that time? We do. If you don't know when a
building was built, we can probably guess it within 10 years.
Did you know that Harvestore silos first started installing
white roof caps instead of blue in 1967? We do.
- Many times it is also important to have an inventory of not
only the buildings and land, but also of the stored grain,
livestock and livestock feed. If you need the machinery and
rolling stock appraised, we can refer you to well-qualified
folks who specialize in the area.
Regarding Economic Damages - Fred Greder,
the principal appraiser, has had the opportunity to testify
several times in lawsuits where livestock confinement sites
have been accused of causing a reduction of value to rural
residential acreages that surround the facility. Greder has
developed a list of at least ten different factors that would
have a bearing on whether proximity to a livestock facility
would cause the value of the neighboring property to go down.
Some of the factors aren't as readily apparent as you might
think. We also have experience in determining what, if any,
impacts are caused by other types of development or usage on
IRS Code Section 2032A -
"Special Use Valuations" - Since December
31, 1976, estate representatives of those who have died have
been permitted to elect on the federal estate tax return to
value eligible real property devoted to farming or other
closely-held business use at its special use or "use" value
rather than fair market value. The most important ingredient
involved in the "special use valuation" process is gathering
cropland cash rent information. We are fortunate to have
developed an extensive network of contacts with landlords,
professional farm managers and attorneys providing us insight
into the current cash rent situation throughout the region.
- Two or three times a year we get a call wondering whether we
can tell somebody what a farm was worth 5, 10, 15 or more
years ago. A divorce settlement may hinge on the value of the
farm at the time of the marriage, or Aunt Gertrude's
10-year-old estate still hasn't been settled. No problem. We
have sales databases going back over 25 years and farmland
market surveys going back 40 years. All that practice at
estimating the original age of houses and outbuildings comes
in very handy for these retrospective appraisals, too.
Minority Interest Discounts - A fractional
interest in a farm probably won't be worth as much per acre as
the whole farm for several reasons. Those reasons include
longer marketing times, partitioning costs, drainage issues
and reduced field efficiency. The size of the discount depends
on several factors. We've never had one of our fractional
interest discounts questioned by the Internal Revenue Service.
- This is a growing part of the appraisal practice. Not every
member of the "baby boom generation" has the same goals for
the farm they inherited from the "greatest generation".
Sometimes the only way to satisfy everybody is to split the
farm. That is not as simple as it sounds. The sum of the parts
might not be equal to the total. We can help minimize the
reduction in value. Sometimes splitting the farm sounds like
the expedient thing to do but, it might not be the effective
thing to do. We can help sort out the difference.
Dates for Estates - Each estate has the
option to elect to value the farmland at an "alternative
valuation date". The "alternative valuation date" is six
months after the original date of death. Usually, the fee to
develop the alternative valuation is much less than the
original fee because of the head start.
Consultation - Private auctions conducted
by attorneys - also called sealed bid auctions - have become
particularly popular since the bio-fuels industry ignited the
land markets in 2006. The title of the company newsletter of
November 2005 was "The Do's & Don'ts of Sealed Bid
Auctions". Check it out. (That newsletter is archived along
with all of the other Benchmark company newsletters on the
Newsletter page of this website.) We are available to help
walk you and your clients through the process, starting with
the very important decision of whether the private auction is
the appropriate way to go. Not every farm should be sold by
auction. Greder has attended several private auctions (even
submitted a bid or two) and has become familiar with the
dynamics of the auction.
Even if you don't see your specific rural real estate need
outlined above, Benchmark
Agribusiness may be able to help
your law firm serve its farm-owning clients more effectively
and completely. Call us at 641-424-6983 to find out.