Preserve your Legacy…. Protect their Future.

It Takes a Vision to Create a Legacy Diann L. Andrews, CFP® Estate and Succession Planning Specialist Disclosure goes here Diann L. Andrews is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. Next Stage Legacy Advisors is not an affiliate of Lincoln Financial Advisors Corp. CRN

Who We Are Lincoln Financial Advisors – Agribusiness Services  Select group of estate and succession planning specialists  Dedicated to working with farmers, ranchers and landowners  Part of a proud, 109-year-old financial services company  Have a national footprint and work with the owners of all types of agribusinesses  Our local group is NextStage Legacy Advisors; based in Amherst, NY Agribusiness Planners Present:  Diann Andrews, CFP®  William Wright, Director of Agribusiness Services  Matthew Wright To learn more about us, visit: 3

Graham Family Farm

Graham Family

70% of U.S. farmland will change hands in the next 20 years...  If a farm family has not adequately planned for succession, it is likely to:  go out of business  be absorbed into ever-larger farming neighbors  be converted to non-farm uses Source: USDA, Family Farms Overview

Who expects to transition your farm to the next generation?  2/3 of all 1st generation farms will FAIL to successfully transition from 1st to 2nd generation  9/10 of all 2nd generation farms will FAIL to successfully transition from 2nd to 3rd generation 7 1 st Generation 2 nd Generation70% failure 90% failure 3 rd Generation Source:

Failure to Plan = Planning to Fail Owners Who Fail To Plan Owners Who Plan Ahead 37% 63% Source: Family Firm Institute web site ( 2007www.FFL.org

Without Proper Succession Planning  Undergoing succession without planning may lead to:  Unprepared successor  Lack of family governance  Knowledge gaps between generations  Poor communication  Conflict  Financial concerns, caused by:  taxation  lack of liquidity  changes in access to credit  cash flow burden of a death/disability/ long term care need

What We Want

What We Fear

Continued Farm Viability Wheatfield recognizes the importance of preserving their rural heritage. Farmland preservation is only possible if farming remains viable. Farm viability:  Keep land available for farming.  Maintain contingency plans  Plan for estate taxation  Estate / Asset protection  Know your retirement needs and affect upon operation

The “We’re All Set” Fallacy So you have a plan:  Is it comprehensive?  How often do you revisit the plan?  Has it been fully implemented?

Is It Comprehensive?  Never take action without knowing the long-term impact on your financial situation.

Is It Comprehensive?  Question: Can I afford to transfer my farm? Fact: Many farmers can’t afford to transfer their operation.

The “We’re All Set” Fallacy So you have a plan:  Is it comprehensive?  How often do you revisit the plan?  Has it been fully implemented?

Things Change  Laws regarding income and estate taxation change  Laws regarding business entities change  Planning techniques – trusts, shelters, liability protections  Family dynamics change  The business grows, shrinks, or morphs

The “We’re All Set” Fallacy So you have a plan:  Is it comprehensive?  How often do you revisit the plan?  Has it been fully implemented?

“We’re All Set” Ask Yourself:  Does our operating or buy/sell agreement encompass death, disability, departure, divorce, deadlock, disagreement, or default?  If any of the above happened; would we be able to afford to implement the plan without jeopardizing the operation?  At my death, will the land stay with the active farm family members or would non-active farm family members inherit the land?  If my neighbor made a great offer to my non-active heirs could they sell? If they sold, what would that mean to the farm’s future?

“We’re All Set”  What expectations should we have for an adult child thinking about coming home to farm? What expectations should that child have?  Will my spouse and I be able to retire and still take income from the farm without causing a cash crunch for our successors? Do we have enough resources to retire without further income from the farm?  Can the farm accommodate more family members?  If I need skilled nursing care, will my spouse and the business be okay? What are our choices for paying for that care?

The “We’re All Set” Fallacy So you have a plan:  Is it comprehensive?  How often do you revisit the plan?  Has it been fully implemented?  The risk of an incomplete plan is a....

What We Fear

Confirming “We’re All Set”  Review  Update  Implement

Who coordinates the activity of your advisors?

Your Succession Team Members  Attorney o Detailed Legal Advice o Document Creation  Accountant o Tax Impact Advice  Succession Planner o Analyze Cash Flows o Coordinates all components o Make Recommendations o Educate You  You o Make Decisions

Final Plan Family Meeting Discovery Preliminary Annual Reviews Implementation Meet with each family unit and collect data Agree on final plan and action steps Review and refine progress Learn family’s common Objectives; agree on timeline Assess current situation; make recommendations and evaluate fit Do legal, estate, financial and leadership actions Planning Timeline

Family Legacy Pyramid  We believe when done well, succession planning positively impacts:  Individuals  Families  Business/Operations  Your customers  Business partners  Lenders  Community Planning for the Individual Planning for the Family Planning for the Business Community Retirement income Long Term Care Asset Preservation Property & Casualty Sickness & Injury Income Tax Estate Planning Advance estate planning Estate/Asset Protection Business Succession and Exit Planning 529 Planning Business Succession and Exit Planning

The Advisor’s Key Role To facilitate the process of establishing common objectives To facilitate communication between family members and other interested parties, keep things moving To share “Best Practices” To have a general understanding of the financial issues and access and coordinate other professional advisors as necessary To act as a catalyst to get things done

Succession Planning What Succession Planning IS NOT: A one-time event Solely a financial issue Only one person’s problem, or the next generation’s problem Solely about reducing estate taxes Solely about transferring equity What Succession Planning IS: A process About people About management, ownership, your estate and your legacy About what is fair vs. what is equal Driven by you and your family’s values, wants, needs, concerns and timelines

Mom and Dad

Graham Family Farm

QUESTIONS?

THANK YOU Diann Andrews Lincoln Financial Advisors / NextStage Legacy Advisors 6400 Sheridan Drive, Suite 320 Amherst, NY (716)