Transcript Farm Transfer and Estate Planning Seminars.ppt

Farmers’ Evaluations
and Behavioral Changes
Due to Attending Farm Transfer
and Estate Planning Seminars
Gary A. Hachfeld
Regional Extension Educator
University of Minnesota Extension
RME Conference, Phoenix, AZ., April 2007
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Copyright 2007. University of Minnesota. All Rights Reserved.
Today’s outline:
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Motivation for program
Program goals
Development, delivery, & evaluation process
Farmers’ evaluations and behavioral changes
Impact of program seminars
Conclusions and lessons learned
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Copyright 2007. University of Minnesota. All Rights Reserved.
Motivation for program:
• Minnesota has 79,300 farms
• 91% are sole proprietorships owned and
operated by farm families
• Total assets: $89.2 billion
• Average age: 53
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Copyright 2007. University of Minnesota. All Rights Reserved.
Iowa State survey of farmers:
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50% had no estate plan
71% had not named a successor
20% had spoken to a banker
30% to an accountant
28% to an attorney
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Copyright 2007. University of Minnesota. All Rights Reserved.
Successful Farming survey:
• 30% of US farm families have not
discussed their plan with family members.
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Copyright 2007. University of Minnesota. All Rights Reserved.
Minnesota farmers’ questions:
• Reducing/eliminating all tax consequences
• Transferring the farm business in light of
long-term health care issues
• Keeping the farm in the family
• Starting the next generation in farming
• Exiting generation retiring comfortably
• Treatment of heirs
• Power-of-attorney
• Life insurance issues
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Copyright 2007. University of Minnesota. All Rights Reserved.
Program goals:
• To introduce farm families to farm transition and
estate planning concepts and techniques.
• To outline strategies and procedures to consider
when developing a transfer and estate plan.
• To address risks arising from lack of:
– Succession planning
– Intergenerational goal setting
– Implementing a farm transfer and estate plan
• End result: farm families draft & implement plans
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Copyright 2007. University of Minnesota. All Rights Reserved.
Development, delivery, & evaluation
process:
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Team approach
Program format, materials, & sponsors
Program agenda
Evaluation process:
• End-of-meeting evaluation & results
• Post-meeting evaluation & results
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Copyright 2007. University of Minnesota. All Rights Reserved.
Program Team:
• Regional Extension Educators (REEs)
– 3 with farm transfer and estate planning expertise
– 2 with tax and farm management expertise
• Collaborators on material:
– CFP, attorney, MNSCU adult farm management instructors
• Only REEs presented
– NO advisors, attorneys, lenders, etc.
• Educational focus NOT sales/consultative focus
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Copyright 2007. University of Minnesota. All Rights Reserved.
Program format, materials, & sponsors:
• Interactive, face-to-face workshops
• 5 hours with breaks & lunch included
• Presenters utilized PowerPoint slide show
• Participants received a copy of the program
workbook to take home
• Sponsors:
– Paid a flat fee to be a sponsor
– Responsible for date, location, recruitment, food
• UM responsible for content and delivery
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Copyright 2007. University of Minnesota. All Rights Reserved.
Program workbook included:
• All PowerPoint slides
• 25 information sheets:
– Detailed information on farm transition, estate
planning, and farm financial management
• Worksheets used during the presentation
• Website addresses for additional information
• Registration & end-of-meeting evaluation
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Copyright 2007. University of Minnesota. All Rights Reserved.
Program agenda:
• Welcome, outline of day, & registration
• Workbook chapters:
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Preparing to transfer the farm business (goals)
Tax considerations
Overview of farm transition strategies
Financial considerations
Estate planning issues
Treatment of heirs and financial assistance
Developing a written transition plan
• Additional questions
• End-of-meeting evaluation
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Copyright 2007. University of Minnesota. All Rights Reserved.
Evaluation process:
• End-of-meeting evaluation
– Understanding – 5 point Likert scale
– Status and plans
– Comments about the program
• Post-meeting evaluation (6 months later)
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Progress on plans & barriers encountered
Usefulness of workbook
Quality of program
Topics for a second meeting
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Copyright 2007. University of Minnesota. All Rights Reserved.
Farmers’ evaluations & behavioral
changes (end-of-meeting evaluation):
• 12 workshops
– October 2005 – April 2006
– 23 local sponsors
• 524 farm family members
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301 farm business units
Participants from 191 different communities
Ages: 22 to 89 (49% over age 55)
33% female; 67% male
• 296 surveys completed
(56%)
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Self-reported understanding of
educational points due to workshop:
“strongly agree” or agree”
Need for clear goals and communication
99%
Transfer strategies
96%
Importance of assessing financial strength
92%
Tax issues
87%
Wills, trusts, and estate planning strategies
94%
Life insurance, power-of-attorney, and health
care issues
90%
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Copyright 2007. University of Minnesota. All Rights Reserved.
Self-reported status of current plans:
Yes
No
Up-to-date estate plan?
42%
58%
Up-to-date farm transfer plan?
5%
89%
If no, plan to start farm transfer
process due to workshop
81%
4%
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Changes in the workshop?
Times noted
No changes
Too long, 2 sessions
More time on wills & trusts
More time on tax issues
Help finding professionals
More examples
More time for discussion
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Best part of the workshop?
Times noted
Discussion on trusts
“All of it”
The workbook
Discussion on wills
Discussion on goals
Good presenters
Estate planning
Unbiased information
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Post-meeting evaluative process:
• Process:
– Mail-out survey with return envelope
– Followed final program by six months
– 301 farm units surveyed
– 152 farm units returned surveys (51%)
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Post-meeting evaluative results:
• Farm transfer plan progress:
– 59.4% reported starting the process
– 12.5% had completed the process
• Estate plan progress:
– 57.3% reported starting the process
– 7.3% had completed the process
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Post-meeting evaluative results:
• Barriers encountered:
– Finding time to complete the process
– Difficulty developing farm, family, & personal
goals
– Lack of family consensus & disagreement
among heirs
– Difficulty finding the right professionals
– Parents not ready to retire & give up control
– “Life events” taking us away from the process
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Copyright 2007. University of Minnesota. All Rights Reserved.
Post-meeting evaluative results:
• Program rating (poor, fair, neutral, good, excellent):
– 95% of participants rated the program good or
excellent
• Rating usefulness of workbook (yes or no):
– 97% of participants rated the workbook as a useful
reference
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Copyright 2007. University of Minnesota. All Rights Reserved.
Impact of seminars:
• Estimated farm business assets involved
in this program: approximately $339 million
– Average balance sheet for Minnesota farm: $1,125,335 (FINBIN)
– 301 farm business units participated
• 59% reported starting the transfer process
– 59% of 301 farm units attending represents $200.3 million
• 12.5% reported completing the process
– 12.5% of 301 farm units attending represents $42.8 million
• Total potential impact: $200.3 million
• Total actual impact: $42.8 million
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Conclusions:
• Program was successful
• 99% of participants agreed or strongly agreed with the
need for clear goals and good communication
• Reported improved understanding of transfer strategies
• Reported better understanding of other educational points
– Educational points involve complex options and details
– So the improved understanding for goals, communications, and
strategies, tax , and estate planning issues is a very good omen
• Able to demonstrate potential & actual financial impact as
a result of the program effort
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Conclusions, cont.
Participants:
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Need basics and a place to begin
Would like more time on specific issues
Thought the program needed no changes
Thought the whole program was the best part
Need examples to clarify points and situations
Appreciate examples & worksheets to clarify
points & situations
– Expressed importance of the workbook as a
reference for future use
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Lessons learned:
• Farm business succession, estate planning, and elder law are very
complicated
• Laws change frequently so accurate, up-to-date information is
crucial
• Working with an attorney is critical:
• One who understands agriculture and specializes in business
succession, estate planning, and elder law
• Working with an accountant or tax consultant is critical:
• One who understands agriculture, tax law and the consequences of
tax issues on the transfer process
• Do not have these professionals present the material:
• Extension is seen as not selling anything, thus trusted
• An attorney or accountant is perceived as selling services
• Can cause program to go in direction not intended
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Lessons learned, cont.
• Work with local sponsors to market the program:
– A local sponsor inviting their customers to the
program results in much better attendance
• The workbook is critical as a handout:
– large amount of information on a complex topic
– future reference piece
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In summary:
• Minnesota participants reported low levels of up-to-date estate
and transfer plans
• Not much different other states
• Workshops had large impact:
– Participants reported increased understanding of the program
educational points
– Able to demonstrate both potential and actual financial impact
• The final conclusion is that we will continue to present these
workshops in the future given:
– Positive response to these workshops
– Obvious need expressed by farmers and others
– The age distribution of farmers
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Copyright 2007. University of Minnesota. All Rights Reserved.
Acknowledgements:
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David Bau, REE, U of M Extension, Worthington, MN.
Rob Holcomb, REE, U of M Extension, Lamberton, MN.
Jim Kurtz, REE, U of M Extension, Worthington, MN.
Bill Craig, REE, U of M Extension, Crookston, MN.
Kent D. Olson, PhD, APL, U of M, St. Paul, MN.
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Copyright 2007. University of Minnesota. All Rights Reserved.
Questions? Comments?
• Contact information:
• Gary Hachfeld, Regional Extension Educator
507-389-6722
[email protected]
• Kent Olson, Professor
612-625-7723
[email protected]
• A “pdf” of the workbook is available by email
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Copyright 2007. University of Minnesota. All Rights Reserved.