Farm Transition & Estate Planning Programming: Participant Behavioral Change, Cumulative Outcomes & Impacts Gary A. Hachfeld Extension Educator – Ag Business Management NCRME Conference St. Louis, MO. April 11-13, 2011

Program Goals Introduce farm/ranch families to business transition & personal estate planning laws, rules, terminology, etc. Outline strategies & procedures they might consider using when developing & implementing a business transition & personal estate plan. Farm/ranch family take new knowledge and confidence and develop & implement a business transition and personal estate plan.

Delivery, Materials & Marketing Face-to-Face workshop setting – PowerPoint slides Workbook: - PowerPoint slides - 26 detailed information sheets - Participant worksheets - Internet resources “Sponsorship Model” - Market to local business sponsors - Sponsor pays us a program fee; selects date, time, location; recruits participants; pays all additional costs.

Program Outline Topics discussed: - Preparing to transition the farm/ranch business (goals) - Tax considerations - Overview of business transition strategies - Financial considerations - Estate planning issues - Treatment of heirs - Financial assistance - Developing a written transition plan

Program Evaluative Process End-of-Meeting evaluations: - Each participant is asked to complete a one page evaluation following each workshop: ♦ Focus on increased understanding of key educational points. ♦ Status of business transition & estate planning. Follow-up evaluation six months following last workshop: - Mailed to participants with return envelope: ♦ Focus on progress toward developing & implementing business transition and personal estate plan. ♦ Obstacles and challenges encountered.

Participant Demographics Programs delivered in MN, ND, IA, & WI. 3,258 total attendees 1,537 farms/ranches represented 1,031 local communities represented 138 local program sponsors involved 84.5% had no business transition plan 69.6% had no personal estate plan Age range: 22 to 89 yrs., 58.1% over age % male and 37.7% female

End-of-Meeting Evaluation Cumulative Results

Participant’s Self-Reporting Whether Their Understanding of Educational Points Increased Due to Attending a Workshop (2004 – 2010) Educational Points Median Score Average Score Standard Deviation % Indicating “Strongly Agree” Or “Agree” Understanding of the need for clear goals & communication in the transition process % Greater understanding of strategies available for use in the transition process % Importance of assessing the financial strength of the business before the transition % Greater understanding of tax issues related to the transition process % Greater understanding of personal estate planning issues % Used Likert Scale with 1 = “Strongly Disagree’ to 5 = “Strongly Agree”

Follow-up Evaluation Cumulative Results

Percent/Number Farm/Ranch Units Starting/Completing Business Transition & Personal Estate Plan (2004 – 2010) Years/States Task (MN) (MN) (MN) (MN, ND, IA, WI) (MN, ND, IA) (MN, ND, IA) Total Businesses Started Business Transition Plan 58.8% (37) 59.4% (57) 61.8% (84) 72.9% (77) 67.2% (65) 68.5% (63) 383 Completed & Implemented Business Transition Plan 11.6% (7) 12.5% (12) 12.2% (16) 15.7% (16) 22.2% (21) 27.0% (17) 89 Started Personal Estate Plan 56.9% (35) 57.3% (55) 67.2% (92) 79.2% (83) 70.2% (68) 65.2% (60) 393 Completed & Implemented Personal Estate Plan 6.5% (4) 7.3% (7) 14.4% (19) 17.1% (18) 23.4% (22) 26.7% (16) 86

Asset Values for Economic Impact Cumulative Results

Average Asset Values Farm/Ranch & Non-Farm/Ranch Assets by Year (2004 – 2010) Average Asset Values Business Assets $1,147,163$1,277,059$1,401,775$1,475,454$1,680,086$1,689,609 Non-Business Assets $144,561$160,240$173,344$169,737$172,990$187,714 Data Source: 1- FINBIN Data Base, Center for Farm Financial Management, U of M, St. Paul, MN. 2- Iowa State University Farm Business Summary

Economic Impact Cumulative Results by Year

Economic Impact Due to an Orderly Process for the Transition of Farm/Ranch & Non-Farm/Ranch Assets Asset Type & Totals Business Assets$8.0 mil$15.3 mil$22.4 mil$23.6 mil$35.3 mil$28.7 mil Non-Business Assets $0.6 mil$1.1 mil$3.3 mil$3.1 mil$3.8 mil$3.0 mil Total Business & Non-Business Assets $8.6 mil$16.4 mil$25.7 mil$26.7 mil$39.1 mil$31.7 mil

$148.2 Million Dollars Program Impact Based Upon Having Implemented An Orderly Process For Asset Transition To The Next Generation

What Have We Learned? ◘ Program demand continues to grow. ◘ “Sponsorship Model” works well for us. ◘ “Sponsorship Model” has strengthened our working relationships with local businesses, leading to other opportunities. ◘ Works very well not having attorneys present material. ◘ Participants state the workbook is a valuable resource. ◘ Evaluative data shows participant behavioral change based upon knowledge increase of subject matter (outcomes). ◘ Evaluative data shows significant economic impact resulting from the program effort (impacts).

Contact Information Gary A. Hachfeld Extension Educator Agricultural Business Management University of Minnesota Extension

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