Farmers could suffer though sitting on gold minesA Bismarck estate planning expert took area farmers and ranchers back to school Wednesday during his presentation on “Intgrating Farm and Ranch Planning with Mineral and Surface Income,” which took place in the Legends Ball Room at the Ramada Grand Dakota Lodge in Dickinson.
A Bismarck estate planning expert took area farmers and ranchers back to school Wednesday during his presentation on “Integrating Farm and Ranch Planning with Mineral and Surface Income,” which took place in the Legends Ball Room at the Ramada Grand Dakota Lodge in Dickinson.
Michael Baron, president of Great Plains Diversified Services Inc., wants to keep area landowners from making mistakes when leasing their land to oil companies.
Some folks with oil-rich land are sitting on a gold mine, but Baron said if written agreements are not handled wisely, families will suffer.
“You’d think money would solve problems,” Baron said. “A lot of cases, it seems to increase the problems, including the strife in the families.”
Because the area is experiencing an oil boom, he added that high estate taxes make some people wonder if the money they stand to make from oil is worth the trouble.
“Estate taxes are kind of back in the picture for a lot of people,” he said. “If your estate does run over $10 million, we start seeing a 50 percent increase on the estate taxes.”
If people want to profit by leasing out their land for oil drilling, he added that they need to focus on the appraisal process.
“These appraisals, we need to get them done first and foremost,” he said. “I can’t do anything with minerals until I know what their value is, because at some point in the future, we’re going to have to tell the IRS what we did, and what it was worth and when it was worth that.”
Maggie Obrigewitch, who farms north of Belfield, said she wants to be smart about what she does with her inherited land.
“I have a trust, and Papa died, and so now we’re right in the middle of the oil thing and I have to get some advice on what to do and how to do it,” Obrigewitch said. “It’s a lot of information, but it’s very informative.”
Shelly Haugen, of Sidney, Mont., wanted to learn more about oil laws, in case she might have to alter her land agreements in the future.
“I’m thinking that things change so fast,” she said. “Maybe we might need to make some revisions.”
While many patrons asked finance-related questions, some farmers and ranchers attended the event because they want to make sure family members can inherit land without any complications.
Lorin and Karen Dvirnak, who own land in Killdeer, had the welfare of their children and grandchildren in mind during Wednesday’s meeting.
“We know that we have to prepare for the eventuality of our deaths,” Lorin said. “How are we going to pass our assets along to our children?”
Karen wants to make sure all future family members are considered in the couple’s oil dealings.
“The one thing we didn’t watch out for is that if our kids adopt, the adopted kids are not included,” Karen said. “If our kids adopt kids, we’ll love them the same as the other grandkids.”
When some people learned there are many obstacles to watch out for when dealing with land that is rich in oil, they expressed their frustration with Baron.
In the end, Baron said it is up to land owners to make sure they are smart with what papers they sign and who their trustees are.
“Don’t kill the messenger,” he joked. “I don’t make the rules.”