Estate planning to begin June 28

By DAVID DUGAN
OSU Extension

As we near the start of the Estate Planning Workshop, this is another story to cite an example of why an estate plan is so important.

Here is another article from an attorney who, in the past, wrote articles concerning estate plans. He gave me permission to use these for educational purposes. The attorney is based in Kentucky, and these articles are over 10 years old, so some details could be different. This is just intended to be used as a teaching tool to get you thinking.

• Mom and Dad have been working on their estate plan for their farm. This work has been going on for several years. They talked about different plans, but they can’t decide how to be fair to all of their children.

The oldest son, Al, worked on the farm until he went to college. During college and after graduation, Al always worked in the city. He has a very successful business career in a city two hours from the family farm. He
brings his family out to the farm for holidays and family gatherings, but he has not felt connected to the farm since he left for college.

Their daughter, Betty, also worked on the family farm when needed until college. After college graduation, she married her college boyfriend. They moved five hours away from the family farm to the suburbs of a large
city to start a family and business career. Betty loves the family farm, but she has no intentions to leave the suburbs until she and her husband retire in 10-15 years.

The youngest son, Charlie, is a farmer. He has lived, eaten, breathed and dreamed about farming since he started talking. He has worked side-by-side with Mom and Dad on the family farm for 35 years. His whole
life, family and economic existence depend on the family farm.

If Mom and Dad divide their estate equally between the three children, would that be fair? Without Charlie’s blood, sweat and tears, the farm and the parents’ estate would not be what they have grown to. Mom and Dad would like to do more for Charlie and also be fair to the non-farm children.

The use of a Limited Liability Company that would have a buy-sell clause in the operating agreement could enable Charlie to buy out the interest of his parents at a discounted amount. The LLC would also allow Charlie to invest his own money in farm improvements with the assurance that his interest in the company would increase.

An option to buy the farm at a percentage of its appraised value could be included in Mom and Dad’s wills or trusts. In their estate plans, Mom and Dad could leave the farm to Charlie and their other investment and cash assets to the other two children. There may not be enough other assets available. A combination of these tools maybe needed.

Life insurance could be used by Charlie to fund the purchase of the farm. First to die or second to die policies can be greatly beneficial in the right situations.

Which option that should be used would depend on the actual finances available and the health and standard of living of Mom and Dad.

Estate and business planning can be your best investment and greatest gift to your family, heirs and beneficiaries.

Attorney Keith Jeffries practices agricultural law in the areas of estate planning & administration.

The Estate Planning Workshop will discuss issues like this and more. Plan to attend starting on June 28 at 6 p.m. at the south campus of Southern State Community College in Fincastle. Pre-registration discounts are good until June 20.

The cost is $90 per couple with additional family members being $25 each (one notebook per family). The cost increases after June 20.

There will be four sessions: June 28, July 26, Aug. 9 and Sept. 13 at Southern State Community College in Fincastle.

• SOACDF Meetings Program changes for the Southern Ohio Agricultural and Community Development Foundation (Tobacco Foundation) will be discussed for the 2012-13 year on Wednesday, July 18, at 1:30 p.m. at the South Campus of Southern State Community College in Fincastle. A second opportunity will be held on Tuesday, July 24, at 6:30 p.m. in the Cherry Fork Community Center. If these dates do not work, you may want to look at the July 12 meeting in Lucasville. This is also a 6:30 p.m. meeting held at the USDA Service Center located on SR 104.