INDIANAPOLIS, Ind. — It’s too late to start planning after a funeral.
Recently, Tanner Coulter witnessed the results of the lack of planning for farm succession. He attended a farm auction that was because the owner had died and the heirs did not have the cash to pay expenses involved in transferring the farm to the next generation.
Coulter, along with Fran Jacoby, will host a seminar on estate planning at the Indiana Farm Equipment and Technology Expo at the Indiana State Fairgrounds. In “When Your Legacy is Tied to the Land,” they will discuss in general what needs to be in a family estate succession plan for farm operations.
Implementing a succession plan before it is critical is a must if the next generation wants to stay on the farm, Coulter said. Both with Prudential Advisors in Indianapolis, he and Jacoby will be on hand for questions from those attending the new Farm Tech Expo, Dec. 11-13, during and after the seminar.
Their goal is to provide enough information to get families started on the business of passing the farm along to the next generation and to ensure future generations will be able to keep the land if they choose. Then they can talk with their attorney and/or CPA about choices that may need to be made.
Words like “liquidity,” “estate taxes” and “probate” may chill the blood of today’s farmers worse than facing a down market at harvest, but Coulter hopes he and Jacoby can show them how to prepare for the day that will eventually come when they leave the farm.
Some of the topics covered in the seminar will be lowering or eliminating estate taxes, estate equalization, raising liquidity and how to afford retirement without giving away the farm, according to Coulter. “Farmers are land-rich and cash-poor, as a rule,” he said. “Cash flow is a problem.”
Some of the difficult questions involving farm succession planning involve estate equalization. There may be some family members who stayed on the farm after school or came back to help parents with the operation. Other family members may have left the farm and have other careers.
“Some family members have 30 years of sweat equity; others don’t have much or any. You have to make it fair to all the family,” he explained.
They suggest farm owners invest now in some sort of vehicle that will offer heirs liquidity when it’s necessary – like insurance, for example.
Sometimes the only option is to sell off ground to meet the expenses involved with estate settlement. Coulter and Jacoby will offer planning options to keep that to a minimum.
Land, of course, is not the only consideration when it comes to settling a farm estate. The homestead, outbuildings, equipment and livestock are also part of the equation. If living in a state where estate taxes (also called “death taxes”) are a possibility, succession planning is crucial.
Jacoby and Coulter are veterans of farm shows. Jacoby has 25 years talking with farmers at shows, Coulter said; he has been involved for the past three. This will be his first year as a presenter.
This is also the inaugural year for the new farm show. For 39 years, the Indiana-Illinois Farm Show was operated by Richard Sherman. He sold the show to the ag network Hoosier Ag Today and Farm World’s parent company, MidCountry Media, Inc.
With a focus on new technology and innovation in ag equipment, the show will feature vendors and presenters on seed genetics, bioscience, artificial intelligence and Big Data, among others. And, of course there will be new equipment on display. For updates, check the show’s website at www.indianafarmexpo.com
Admission to the show is free, but there may be parking fees. Contact Toni Hodson for information on exhibit space, at 800-876-5133, ext. 280.