By Christopher Doering | USA TODAY
The aging farming population is forcing more operators to deal with the complexities of how to pass along the business to the next generation. Advocacy groups are trying to provide training.
The aging of the farming community is prompting more attention to estate planning
Experts say many farmers aren’t doing enough to prepare for passing along their operations
The reasons farmers often put off estate planning include time and the complicated tax code
When Varel Bailey and his fellow shareholders meet this month, the seven-member family board that includes his three children will focus their attention on one issue: who should benefit from the financial success of the farm.
Bailey’s parents first began giving shares annually in the Anita, Iowa, farm in 1966 and continued doling out stock equally to their three children during the next 40 years. While Bailey stayed on the farm and helped increase its value, his sisters left and now at least one of them wants to receive full value for her shares. But Bailey believes she didn’t contribute to their appreciation and is entitled to one third of the value of the parents’ estate at the time he joined the operation but not a third of its value today.
As the 73-year old crop and livestock operator prepares the 1,200-acre farm for the future, Bailey is working to determine the “fairness factor,” as he calls it, to reward his son, Scot, who has worked with him since 1990 while at the same time fairly rewarding his two daughters who left the farm to embark on successful careers outside of rural America. Currently, each of his three children would receive a third of his shares.
Statement by Laura Bianchi, director Rose Law Group Estate Planning/Asset Protection Department: Ensuring you have taken the proper estate and business succession planning steps is essential for any individual who owns his or her own business, whether it be a farm or otherwise. Often the bulk of a person’s net worth is wound up in his or her business and the failure to make the appropriate plans for succession as well as ensuring you have addressed issues such as mandatory liquidity, operations and management, buy-outs etc. can mean long term success or failure. Properly planning for your estate includes your personal and business assets.
If you’d like to discuss estate planning/asset protection, contact Laura Bianchi, Director Rose Law Group Estate Planning/Asset Protection Department, lbianchi@roselawgroup.com
