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Farm Succession Planning

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  1. Farm Succession Planning

  2. Marsha GoettingPh.D., CFP, CFCS Professor & Extension Family Economics Specialist Department of Agricultural Economics & Economics

  3. Special Request from: • Members of Planning Committee

  4. Make your estate planning presentation!!!!!! • Lively • Interesting • Exciting

  5. Don’t want to think about • Death • Dying

  6. Experiment Succession/Estate Planning Team Contest • Valuable prizes !!!

  7. Divide into Groups • 4 - 7 people

  8. First Decision • Select TeamName • 30 Seconds

  9. Second Decision –Select Team Runner • Answers on Board • Each time your team responds to a question • Write team name & answer on sticky note Ravalli Raiders 50%

  10. Rewards • “Winning Team” • gets to select prizes at the end of the session

  11. “Who” Gets Your Property When You Die????

  12. State Law Determines

  13. Titled Real Propertyincludes: • Land • Home

  14. Titled Personal Property includes: • Savings & Checking Accounts • Certificates of Deposits • Motor Vehicles • Stocks & Bonds

  15. Property passes by: • Contract Law • Written Will • Law of Decent & Distribution • Trust Agreement

  16. Contract Law • Beneficiary Designations • Life insurance • Annuities • IRAs • Keogh

  17. Bill Vere Life Insurance

  18. Beneficiary • Bill has $100,000 life insurance policy • Designates Vere as his primary beneficiary

  19. Bill’s Will • “I bequest all my life insurance proceeds to my son, Chris Shelton.”

  20. Who gets $100,000? • Vere, wife? • Chris, son?

  21. $100,000 Life Insurance Proceeds • Vere • Contractual arrangement • Designated Beneficiary

  22. Estate Planning Task • Determine who are the beneficiaries of your life insurance policy/policies

  23. Payable on Death Designation (POD) • Accounts at financial institutions • At death ownership passes to POD beneficiaries

  24. Transfers on Death (TOD) Registration • Stocks • Bonds • Mutual funds

  25. Dying Without a Will: Who Receives Your Property?

  26. PERSONAL PROPERTYNo matter where located, distributed according to laws of state in which decedent had domicile at time of death.

  27. REAL PROPERTYLocated outside state of residence distributed according to that state’s intestacy laws.

  28. Estate Planning Task • What & Where • Determine in whose name is on title of real & personal property • Location?????

  29. Business Arrangements--2002 Census, Oregon Sole proprietorship/family 88% Partnership 6% Corporation 5% Estates/trusts, other 1% 40,033 farms

  30. Single Person Property in one person’s name only. Part of owner’s estate upon death.

  31. Single Person Mother 1/2 Dad 1/2 Single Guy/Gal

  32. What fraction (if any) will brother receive? No Written Will

  33. Team Question • What share if any does Brother receive?

  34. What fraction (if any) will brother receive? No Written Will

  35. Right of Representation ?

  36. Married Couple • John & Mary property titled John’s name only (sole proprietorship) • No children

  37. Auto Accident • John dies first • Mary dies3 days later

  38. Team Question • Who receives the property?

  39. Who Receives? • John dies first • Mary dies3 days later

  40. Who receives????? • John dies first • Mary dies 3rd Day • John’s relatives receive property

  41. Survival Requirement • An heir must survive 120 hours • Otherwise, treated as predeceasing the decedent

  42. Who receives property????? • John dies first • Mary dies 6 days later • Mary’s relatives receive property

  43. Sole Ownership • John & Mary need a written will • if they want to control who receives their property

  44. Co-owners with right of survivorship Real Property

  45. Right of Survivorship • On death of either, survivor takes all

  46. Husband dies

  47. Husband dies

  48. Wife dies with all property

  49. Wife dies with all property

  50. Remarriage with husband with right of survivorship husband