Lessons Learned from Estate and Transition Planning Workshops
2015 Risk Management Education ConferenceApril 29, 2015 Bloomington, Minnesota
Jason Johnson and Blake BennettTexas A&M AgriLife Extension
Estate and Transition Planning
Workshop for Agricultural Producers
Purpose of the Workshop
• Introduction to Estate, Retirement, and Transition planning issues relevant to agricultural producers
• Establish an outline of strategies and procedures to consider when developing or updating your Estate/Retirement/Transition plan
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The Goals for the Workshop
You leave with knowledge and confidence to assist you to . . . .
• Compile & review your own information….
• Communicate an outline to your professional team…. and
• Create or modify a transition / estate plan that is right for your circumstances.
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Participants of the Workshop• 154 participants attended the Estate and Transition Planning Workshops at Abilene,
Stephenville, Fredericksburg, McKinney, and Waco.
• Attendees represented 357 family members, partners or shareholders who also had a working interest in the operation. The aggregated management tenure on the present farm/ranch by participants was 5,440 Years.
• 87% of Farms/Ranches were individually or family owned; 7% were partnerships, 3%
LLC's; 2% Corporations; and 1% Trusts.
• 18% of Farms/Ranches had been in operation for less than 10 years; 24% had operated for 11 to 29 years; 27% had operated for 30 to 49 years; 31% had been in operation for over 50 years.
• Average age of attendee was 64.5 years of age with 4% under 44; 40% between 45 and 64; 36% between 65 and 74; and 20% over age 75.
Property Holdings of ParticipantsParticipants owned/managed 77,970 acres in 58 Texas
counties as well as properties in Oklahoma, Iowa, and Colorado.
Pre-Workshop Actions/Attitudes
• PRIOR TO ATTENDING THE WORKSHOP:
85% had a Will.63% had Power of Attorney forms granting permission to act on their behalf. 64% had Medical Directive to Physician documents.
• Most Important Estate Planning Objectives among a list of five alternatives:
31% Maximize wealth to be passed to heirs.23% Keep land holdings intact / preserve the family's agricultural legacy.21% Ensure the financial well being of a surviving spouse/family member.20% Avoid family strife by distributing property equitably among heirs.5% Maintain privacy of personal assets and minimize administration costs.
Estate and Transition Planning Workshop
for Agricultural Producers
Workshop Agenda• Estate Planning Basics • Lunch and Case Study Discussion• Estate Planning Basics (continued)• Retirement Planning Basics • Transition Planning Basics
On Your Memory Stick
On Your Memory Stick
Workshop Results
• AS A RESULT OF ATTENDING THE WORKSHOP: 98% indicated they are more familiar with estate planning terminology.94% indicated they are more likely to communicate their estate plans with family.89% indicated they know the actions needed to minimize their estate subject to probate.98% indicated they understand who should be included in their estate planning team.98% indicated they know what information they need to compile to discuss estate
planning with their professional team.78% indicated that they know if they face potential estate/gift tax concerns.73% indicated that they plan to visit with their attorney to revise/modify their Will as a
result of what they learned at the workshop.84% indicated that they plan to review their retirement income needs and the reliance on
the farm/ranch to meet them.54% indicated that they plan to review their (life, Health, Long-Term Care, etc.) insurance
coverage.
Which resources are you most likely to use in completing or developing your plans?
• Participants were provided with a workbook, USB memory stick with all presentations and additional resources, checklists, and worksheets to assist them in completing and implementing their Estate and Transition Plans.
81% Estate Plan Checklist75% Trust/Will Review Checklist66% Transition and Estate Planning Goals Prioritization64% Estate Planning Questionnaire56% Fair vs. Equitable Treatment of Heirs Exercise46% Financial Emergency Preparedness Record Keeping File45% Integrated Balance Sheet and Net Worth Worksheet43% Farm Transfer Plans Worksheet34% Retirement Income and Expenses Worksheet33% Transition Plan Goals Clarification Worksheet30% Succession Planning Self Assessment29% Long Term Care Insurance Assessment Tool22% IRA Plan Alternatives Summary19% Life Insurance Needs Assessment Worksheet
4 Month Follow up Survey Results43% response rate of workshop participants
95% indicated that they were making progress in using and implementing the information gained in their individual plans.
88% of respondents indicated that they were more comfortable about the status of their estate/transition plans;
88% had taken a detailed inventory of the value of their estate;
85% had reviewed their retirement income needs and sources of income;
62% had reviewed their insurance coverage;
56% had met or scheduled a meeting with an attorney; and
79% of respondents indicated that they still had some work to do to complete their estate/transition plans.
Questions on the Mind of Many Farm Families…
Are we creating a legacy or a burden by passing the
agricultural operation to our heirs??
Do we want to pass the family farm/ranch business to heirs as an ongoing business or as
a group of assets??
Fair vs. Equal
• Issues of fairness
• Topic best suited for couples/family stakeholders• Materials/Delivery concessions for Older audiences
(paper and digital formats)• Circular seating to accommodate discussion• Multi-sourcing content• Working Lunch – the power of food• Role of Extension – objective provider of knowledge• Potential Partners – drooling to gain access to
participants
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