a) Farmers are in business; farmers generally own or lease significant real estate; farmers usually need a lot of equipment; most farms need a lot of water; farming is usually dependent on the weather; farming can be a real up & down business; farmers often struggle with automation versus need for cheap labor.
b) While perhaps not unique, a farmer’s real estate often suggests use of an entity to hold the real estate; the equipment suggest use of an entity rather than a sole proprietorship for ease of transfer; the transition of the farm to the next generation can be especially problematic because frequently not all of the children wish to continue in the farming business.
c) What’s not so different from planning for other types of family businesses?
i) The need for wills, trusts, durable powers of attorney, in short, an updated overall estate plan.
ii) An estate plan in the event of death or disability.
iii) A revocable living trust is a legal arrangement to hold property/assets for its creator (the “Grantor” or “Settlor”). It is a useful estate planning tool because its administration typically does not require probate.
iv) The trust is usually managed by its creator until death and then a third party (a “successor trustee”) is designated to assume that role. An individual person (a friend or family member), a professional private fiduciary or a corporate trustee can be designated as successor trustee. It is possible for multiple trustees (co-trustees) to act together. In the case of a farm operation (or other business), there may be a division of trustee responsibility: one trustee can be responsible for the farming operation while another trustee may hold and manage the passive investments.
Download this report to read more about estate plan fundamentals for farmers.
Agenda
Faculty
Mark R. Shepherd
Crist, Biorn, Shepherd & Roskoph
• Shareholder with the law firm of Crist, Biorn, Shepherd & Roskoph
• Clients include wealthy individuals, C and S corporations, limited liability companies, partnerships, and family foundations
• Provides tax opinions and tax dispute resolution
• Achieved the highest rating with Martindale-Hubbell Law Directory
• Lectures and teaches frequently in the areas of taxation and estate planning
• Wrote ‘2036(c)Alert’ published in the Fall 1989 issue of the Golden Gate University Tax Exchange and co-wrote Estate Planning for Farmers and Ranchers, University of California Publication 21515, 1993
• J.D. degree, with honors, and LL.M. degree, Golden Gate University School of Law; B.A. degree, magna cum laude, San Francisco State University
• Can be contacted at 650-321-5005 or [email protected]
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