6 minute read
ESTATE PLANNING Add more certainty to your future
from FARM CREDIT EAST
by NDSACatalogs
CREATING CERTAINTY FOR YOUR FAMILY.
No one knows what tomorrow will bring. But if you delay planning for it, you could leave your family with confusion and conflicts rather than the proud legacy you’ve worked so hard to achieve.
Farm Credit East business consultants have helped thousands of Northeast farm families achieve their estate planning goals and add more certainty about their future in the process.
WHY ESTATE PLANNING IS IMPORTANT
Planning well in advance for the future of your estate accomplishes many objectives, including the following:
• Ensures that your assets will be used to benefit the people you choose • Protects your family from difficult, costly or even heartbreaking outcomes • Can ensure a comfortable retirement for you and your spouse • Lays the groundwork for the next generation to take the reins • Provides certainty for your farm and, more importantly, for your family
DEMYSTIFYING THE PROCESS
Planning for the future doesn’t have to be complicated or intimidating. Our business consultants break the process down into manageable pieces. Some families start the process thinking that it will be overwhelming, but by working closely with a Farm Credit East consultant, your family can build a plan that will provide peace of mind. No matter what happens, you can be assured that your loved ones will be taken care of.
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Learn more about Farm Credit East CONSULTING SERVICES at FarmCreditEast.com.
SORTING OUT SENSITIVE ISSUES
Any business or estate plan involves many factors: finances, insurance, legal documents and personal feelings. Our consultants are skilled at asking the hard questions, such as how to treat off-farm children equitably, how to protect a farm from an impending divorce or how to select a next-generation successor for the farm. We are able to speak dispassionately with family members, which allows us to move the process along and put each member at ease.
NOT A ONCE-AND-DONE TRANSACTION
Estate planning is not a one-time event.
Businesses are dynamic and evolve year by year. Estate tax laws change. People get married or divorced or become disabled. Babies are born. Children return to the farm after college with ideas for improving the business.
After implementation of a plan, the next step is review. We will review your plan with you annually so we can help keep your plan on track.
WEIGHING HEALTH CARE COSTS
Of course, the 900-pound gorilla in the room is how the cost of health care for the senior generation fits into estate planning, retirement planning and transitioning the business. We will help you understand the implications of Medicare and will discuss the limited coverage and strict qualification requirements for Medicaid.
ALL YOUR TRUSTED ADVISORS AT ONE TABLE
Other professionals whom you trust are welcome to participate in our estate planning process so that you can ensure that everyone servicing your business is working toward the same goals. This collaborative approach will also help you understand how many of your decisions are interrelated. Additional participants often include life insurance agents and lawyers. For our part, we bring Farm Credit East tax specialists, appraisers or your loan officers to the table as needed.
FAMILY BUSINESS TRANSFERS
We focus on ensuring that the senior generation has adequate income or assets for retirement. Some customers are so accustomed to making sacrifices for the next generation that they believe they can live on less income than they need. We will work with you to make an honest assessment of what you will need in retirement with a safe margin, so you don’t sell your retirement years short.
• We help families develop a successor by utilizing the Farm Credit East GenerationNext training program. • Continuity of the business is a key aspect of every plan. We help families maintain their business legacy for future generations as well as their favorable reputation in the community. • Much of the transfer process revolves around a definition of each family member’s personal responsibility. This gives each member a stake in the future of the business and an understanding of their role in the planning process.
DON’T GAMBLE WITH YOUR LIFE OR YOUR LEGACY
Call your local office to learn more about how a Farm Credit East consultant can help your family achieve its estate planning goals and increase your certainty about your business’s future in the process.
FREQUENTLY ASKED QUESTIONS
When should I begin estate planning?
The sooner a family initiates the process, the easier it is. Beginning early allows you the time to accumulate the dollars required for the senior generation’s retirement without harming the future of the business. Ideally, you want to begin planning when you are around 55 years old and your children are in their 20s. This gives you a 10-year window to transfer assets and management. At 65, you will be easing into retirement and your children, at 35, will have gained the skills to manage the operation. We encourage people to take a leisurely approach to estate planning.
How does a consultant work with our family on estate planning?
A Farm Credit East consultant creates an environment of mutual expectations so your estate plan will be successful. We ensure that each player has a chance to help the owner make choices about what he or she wants to implement. We organize consistent meetings and check in to see that each participant accomplishes their specific responsibilities so as to be sure that the plan is implemented as expected. Managing consistent meetings on a timely basis and ensuring that we arrive at clear conclusions offers tremendous value in moving the process forward.
Does transferring a business to the next generation also mean the transfer of control?
The transfer of equity doesn’t necessarily mean the transfer of control. Our consultants will discuss many options with you so equity can be moved to the next generation without the senior generation giving up control in the business.
Who should do estate planning?
Estate planning is essential for all business owners. We help families with various levels of net worth create an estate plan so they can leave assets to the next generation. By working with a Farm Credit East consultant, you will develop a plan that ensures that the senior generation has a comfortable retirement by first determining a realistic view of their retirement needs, including the cost of health care and how nursing home care will be paid.
A VIEW FROM THE FIELD
PLANNING FOR THE FUTURE
Tom Osborne is an eighth-generation farmer in Loudon, N.H. He and his two brothers, Paul and Andy, operate the family farm as well as three Osborne’s Agway retail locations. In 2005, before the Osborne brothers took over the family business, their Farm Credit East representative contacted Tom’s parents about a succession plan. While this was a tough decision for the family, they knew it would be beneficial to have a concrete plan in the long run.
HOW WE HELPED
“Andy and I were already involved in the business, and our brother Paul was coming back into the business after a few years of being self-employed,” said Tom. “We met with Farm Credit East to restructure the business and create new LLCs.”
With the help of Farm Credit East, the Osbornes made a very complicated process much easier. “I’m thankful now in retrospect,” continued Tom. “Thanks to our proactive planning, we had things well mapped out, never thinking the day would come when Mom and Dad would be gone — but when they were, it was relatively painless sorting out the estate.” “Farm Credit East has a great team of people who have helped us during some of the most critical times of our business. We couldn’t do it without them.” – Tom Osborne
