Wautoma, WI
Current Conditions
0:56 AM CDT
Clear
Temperature
66°F
Dew Point
58°F
Humidity
76%
Wind
CM at 0 mph
Barometer
30.04 in. F
Visibility
10.00 mi.
Sunrise
05:45 a.m.
Sunset
08:21 p.m.
Morning Forecast (7:00am-12:00pm)
Temperatures will range from 58 to 78 degrees with clear skies. Winds will remain steady around 4 miles per hour from the west. No precipitation is expected.
7-Day Forecast
Friday
81°F / 57°F
Partly Cloudy
Saturday
78°F / 61°F
Scattered Showers
Sunday
78°F / 61°F
Light Rain
Monday
79°F / 61°F
Light Rain
Tuesday
74°F / 56°F
Light Rain
Wednesday
72°F / 56°F
Light Rain
Thursday
64°F / 59°F
Rain
Detailed Short Term Forecast
Issued at 0:56 AM CDT
Friday...Temperatures will range from a high of 81 to a low of 57 degrees with partly cloudy skies. Winds will range between 2 and 13 miles per hour from the west. Less than 1 tenth inch of rain is possible.
This Afternoon ...Temperatures will range from 81 to 71 degrees with mostly cloudy skies. Winds will range between 6 and 13 miles per hour from the southeast. Rain amounts of less than a tenth of an inch are expected.
This Evening ...Temperatures will range from 70 to 60 degrees with partly cloudy skies. Winds will remain steady around 4 miles per hour from the south. No precipitation is expected.
Overnight ...Temperatures will range from 62 to 57 degrees with partly cloudy skies. Winds will range between 2 and 6 miles per hour from the south. No precipitation is expected.
Saturday...Temperatures will range from a high of 78 to a low of 61 degrees with partly cloudy skies. Winds will range between 3 and 6 miles per hour from the south. 0.54 inches of rain are expected.

Farm succession planning: An unavoidable topic

April 28, 2014 | 0 comments

JUNEAU

As Benjamin Franklin said many years ago, "In this world, nothing can be said to be certain, except death and taxes."

Farm families, more than anyone, need to think about what will happen with the farm and business if something happens to the owner. And, it is important to think about it while they are still alive and well and in a good position to make plans for the farm and their loved ones.

With that in mind, the Dodge County Farm Bureau recently hosted a Farm Succession and Estate Planning workshop.

At the meeting, farmers had an opportunity to discuss viable solutions to business and estate succession issues and get their questions answered by those who deal with the issues every day.

Participants considered how to be fair to their children in passing the business on to their heirs while also providing a fair inheritance to children who are not involved with the farm.

Richard Bollenbeck, an attorney from Appleton, shared ideas on farm estate planning, wills, trusts and preserving the business in the event of death. He also talked about protecting the estate in the event the owner of the farm needs to go into a nursing home.

Bollenbeck said every farm couple should have an estate plan and a will. This provides the peace of mind knowing that if something were to happen, they would have already worked through the questions of what will happen to the business, who will run it, how will they acquire it and what will the tax consequences be.

He pointed out that the state has a plan for a business if the business owners do not establish a plan.

"Estate planning is simply controlling what you have while you are here," he said.

The first step, he said, is to think about, and write down, what should happen with the farm if you, as owner, die or become disabled. Look at the economics and other factors, such as whether there are other family members involved. Also, think about retirement plans, how retirement will be funded and the potential need for long-term care.

Build a team

The next step is to assemble and work with a team of professional advisers to put these ideas into motion. The estate planning team needs an experienced attorney as the anchor of the team to draft documents. Other team members could include a farm accountant or insurance professional or other business consultants.

Bollenbeck said estate tax planning should not be a complicated process. Too often, individuals are overwhelmed with the technical details of the plan and lose sight of the overall goal: to provide a road map for the future with an eye toward minimizing any negative tax impacts when transferring assets to the next generation.

When an estate includes a farm with family members involved in the business, estate planning is more complicated. In most cases, the plan should include a way to keep the business going while still making funds available for other non-farming family members.

To make such a plan, it is important to look at the needs and long-term goals of the family business.

Planning for the future of the farm, according to Bollenbeck, begins with the balance sheet. Determine the value of the farm and the property; consider any debt and cash flow.

"If you are planning around the value you estimate for your farm, or what the banker has told you it is valued at, you may be in for a shock when the IRS comes along and values it at twice as much," he cautioned.

Wills and trusts

Bollenbeck also discussed wills and trusts and explained that a revocable trust means it can be changed or amended at any time. Irrevocable means it is permanent.

"A trust protects you when you die but not if you go into a nursing home," he explained.

While a trust is not for everyone, he said, "It is a way to keep your assets private, versus having them become public record when you die. Under most circumstances, you could avoid the Wisconsin probate system that requires almost 12 months of administration to go through if there is a death. You would avoid attorney fees related to probating the estate, and you could minimize or avoid Wisconsin state death tax or federal estate tax related to probate."

Many of the participants in the workshop expressed concern about losing control of their assets if they are placed in a trust. Bollenbeck said, "A revocable trust provides the opportunity to keep complete control of your assets by simply physically transferring any real estate you own into the trust. If necessary, other assets held and managed by you as trustee could be transferred into the trust as well."

He said a second document normally accompanying the revocable trust is a Comprehensive Transfer Document, along with a Pourover Will.

"This document normally states that if a will was necessary upon death, the payment of funeral, administrative and legal expenses would be paid first," he said. "After that, all other assets would be poured into the trust. A relative or child could be listed as personal representative.

"We are hopeful you would not have to utilize that document."

Bollenbeck said discussions about estate planning should also include establishing a health care power of attorney and a declaration to physicians. Also, think about who should make financial decisions in the event you are unable to do so, he advised.

A durable power of attorney provides the authority for the person chosen to make day-to-day financial decisions if you are physically unable to do so. Those duties could include depositing checks; cashing checks; getting into a safe-deposit box; paying bills and taxes; buying and selling real estate property; and other duties.

Life insurance

Jared Nelson from Farm Bureau Financial Services and Renee Blair, Rural Mutual Insurance, offered ideas for utilizing insurance in an estate plan.

Whether life insurance payouts are taxable depends on who owns the policy. If it is owned by the person who passes away, it goes into their net worth at the time of death.

They also mentioned options for long-term care protection, such as purchasing long-term health care insurance.

For some, an alternative may be to buy a life insurance policy that could pay out in advance for long-term care if needed. The long-term care payout kicks in when the person covered by the policy cannot perform two of the six functions of daily living, and it is determined they need to go into a nursing home. It is more expensive than a regular life-insurance policy, but if the insured does not end up in a nursing home, the life insurance is still intact when they die.

Another consideration is the Wisconsin Partnership Program that offers tax incentives for establishing a pool of funds designated for long-term health care. It can be established as a couple, and if one person uses a part of the pool, the second can use the remainder when the time comes.

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