Community Supported Agriculture (CSA) arrangements, facilitated through Charitable Remainder Trusts (CRTs), present a compelling pathway to bolster sustainable agriculture projects, offering both financial support and community engagement. CRTs are irrevocable trusts that allow donors to transfer assets, receive income for a specified period, and then have the remaining trust assets distributed to a designated charity—in this case, organizations dedicated to sustainable farming. This structure allows individuals to support a cause they believe in while potentially reducing their tax liability and securing an income stream during their lifetime. Over 60% of consumers state they are willing to pay a premium for sustainably sourced products, creating an economic incentive for farmers to adopt these practices, and CRTs can help bridge the financial gap during transition or expansion.
What are the tax benefits of using a CRT for farm preservation?
Utilizing a CRT for sustainable agriculture extends beyond simple donation; it’s a strategic tax maneuver. Donors can avoid capital gains taxes on appreciated assets, like farmland or stocks, when transferred into the trust. This can be substantial; capital gains tax rates can reach 20% plus the 3.8% net investment income tax. Furthermore, the donor receives an immediate income tax deduction based on the present value of the remainder interest—the portion of the trust that will eventually go to the charity. According to the National Center for Philanthropic Planning, this deduction can be significant, potentially offsetting a substantial portion of the donor’s adjusted gross income. For example, a $1 million asset transferred to a CRT might generate an income stream for the donor and a charitable deduction in the hundreds of thousands of dollars.
How can a CRT help farmers transition to organic practices?
The shift to organic or regenerative agriculture can be financially challenging for farmers. These methods often require upfront investment in new equipment, soil amendments, and certification processes. A CRT can provide a stable funding source to support this transition. The income generated from the trust can cover the costs of implementing sustainable practices, while the ultimate charitable donation supports the long-term viability of the farm. Interestingly, studies show that organic farms often have higher profitability per acre than conventional farms after the initial transition period. In one case, a local farmer, Old Man Tiber, was determined to move to organic practices but needed capital to get started; he was considering a conventional loan, which came with high interest rates and strict repayment schedules.
Old Man Tiber had inherited his farm, a beautiful parcel of land nestled in the hills. He was proud of his heritage but worried about the future. He didn’t want to contribute to the degradation of the land with harmful chemicals, but he also needed to make a living. He had been putting off making the change for years. One day, while visiting the local farmer’s market, he met Steve Bliss, an estate planning attorney, who explained how a CRT could help. Steve outlined how a CRT, funded with a portion of his land, could provide him with a steady income stream while supporting his transition to organic farming, eventually gifting the land to a non-profit focused on sustainable agriculture. The relief on Old Man Tiber’s face was instant.
What happens if a farm isn’t properly planned for succession?
Without proper estate planning, farms – particularly family farms – are vulnerable to being sold off for development, disrupting local food systems and losing valuable agricultural land. According to the USDA, farmland is being lost at an alarming rate – an estimated 2,000 acres per day in the United States. This loss is often due to estate taxes, lack of succession planning, or financial pressures on the farming family. The story of the Henderson family illustrates this all too well. They’d farmed their land for five generations, but after the patriarch passed away without a clear estate plan, the farm was quickly entangled in legal battles. Family members fought over ownership, and eventually, the land was sold to a developer who built a housing complex. The local community mourned the loss of the farm, a landmark that had provided fresh produce for decades. A similar situation would have been avoided with a well-structured CRT.
How did a CRT save another farm from a similar fate?
The Miller family, also multigenerational farmers, faced a similar challenge. They wanted to preserve their farm for future generations but worried about the estate tax burden. Steve Bliss, recommended a CRT, funding it with a portion of their farmland. The CRT provided income for the aging parents and ensured the remaining land would be protected by a local land trust dedicated to sustainable agriculture. The trust continued to operate the farm using organic practices, preserving the family’s legacy and providing fresh, healthy food for the community. This demonstrated that with forward planning and the proper tools, a farm’s sustainability can be secured. It wasn’t just about money, it was about preserving a way of life, a heritage, and a vital part of the community fabric.
“A CRT is more than just a financial tool, it’s a way to leave a lasting legacy and support causes you care about.” – Steve Bliss, Estate Planning Attorney.
Ultimately, a CRT can be a powerful instrument for supporting sustainable agriculture projects. It provides a win-win scenario: donors receive income and tax benefits, farmers receive financial support for transitioning to sustainable practices, and communities benefit from preserved farmland and local food systems.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
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Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “How can I leave charitable gifts in my estate plan?” Or “Can I challenge a will during probate?” or “What happens to my trust after I die? and even: “Can I file for bankruptcy without my spouse?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.