Lessons Learned from Estate and Transition Planning Workshops 2015 Risk Management Education Conference April 29, 2015 Bloomington, Minnesota Jason Johnson and Blake Bennett Texas A&M AgriLife Extension Estate and Transition Planning Workshop for Agricultural Producers

Purpose of the Workshop Introduction to Estate, Retirement, and Transition planning issues relevant to agricultural producers Establish an outline of strategies and procedures to consider when developing or updating your Estate/Retirement/Transition plan 2

The Goals for the Workshop You leave with knowledge and confidence to assist you to.... Compile & review your own information…. Communicate an outline to your professional team…. and Create or modify a transition / estate plan that is right for your circumstances. 3

Participants of the Workshop 154 participants attended the Estate and Transition Planning Workshops at Abilene, Stephenville, Fredericksburg, McKinney, and Waco. Attendees represented 357 family members, partners or shareholders who also had a working interest in the operation. The aggregated management tenure on the present farm/ranch by participants was 5,440 Years. 87% of Farms/Ranches were individually or family owned; 7% were partnerships, 3% LLC's; 2% Corporations; and 1% Trusts. 18% of Farms/Ranches had been in operation for less than 10 years; 24% had operated for 11 to 29 years; 27% had operated for 30 to 49 years; 31% had been in operation for over 50 years. Average age of attendee was 64.5 years of age with 4% under 44; 40% between 45 and 64; 36% between 65 and 74; and 20% over age 75.

Property Holdings of Participants Participants owned/managed 77,970 acres in 58 Texas counties as well as properties in Oklahoma, Iowa, and Colorado.

Pre-Workshop Actions/Attitudes PRIOR TO ATTENDING THE WORKSHOP: 85% had a Will. 63% had Power of Attorney forms granting permission to act on their behalf. 64% had Medical Directive to Physician documents. Most Important Estate Planning Objectives among a list of five alternatives: 31%Maximize wealth to be passed to heirs. 23%Keep land holdings intact / preserve the family's agricultural legacy. 21%Ensure the financial well being of a surviving spouse/family member. 20%Avoid family strife by distributing property equitably among heirs. 5%Maintain privacy of personal assets and minimize administration costs.

Estate and Transition Planning Workshop for Agricultural Producers Workshop Agenda Estate Planning Basics Lunch and Case Study Discussion Estate Planning Basics (continued) Retirement Planning Basics Transition Planning Basics

On Your Memory Stick

Workshop Results AS A RESULT OF ATTENDING THE WORKSHOP: 98% indicated they are more familiar with estate planning terminology. 94% indicated they are more likely to communicate their estate plans with family. 89% indicated they know the actions needed to minimize their estate subject to probate. 98% indicated they understand who should be included in their estate planning team. 98% indicated they know what information they need to compile to discuss estate planning with their professional team. 78% indicated that they know if they face potential estate/gift tax concerns. 73% indicated that they plan to visit with their attorney to revise/modify their Will as a result of what they learned at the workshop. 84% indicated that they plan to review their retirement income needs and the reliance on the farm/ranch to meet them. 54% indicated that they plan to review their (life, Health, Long-Term Care, etc.) insurance coverage.

Which resources are you most likely to use in completing or developing your plans? Participants were provided with a workbook, USB memory stick with all presentations and additional resources, checklists, and worksheets to assist them in completing and implementing their Estate and Transition Plans. 81%Estate Plan Checklist 75%Trust/Will Review Checklist 66% Transition and Estate Planning Goals Prioritization 64%Estate Planning Questionnaire 56%Fair vs. Equitable Treatment of Heirs Exercise 46% Financial Emergency Preparedness Record Keeping File 45%Integrated Balance Sheet and Net Worth Worksheet 43%Farm Transfer Plans Worksheet 34%Retirement Income and Expenses Worksheet 33%Transition Plan Goals Clarification Worksheet 30%Succession Planning Self Assessment 29%Long Term Care Insurance Assessment Tool 22%IRA Plan Alternatives Summary 19%Life Insurance Needs Assessment Worksheet

4 Month Follow up Survey Results 43% response rate of workshop participants 95% indicated that they were making progress in using and implementing the information gained in their individual plans. 88% of respondents indicated that they were more comfortable about the status of their estate/transition plans; 88% had taken a detailed inventory of the value of their estate; 85% had reviewed their retirement income needs and sources of income; 62% had reviewed their insurance coverage; 56% had met or scheduled a meeting with an attorney; and 79% of respondents indicated that they still had some work to do to complete their estate/transition plans.

Questions on the Mind of Many Farm Families… Are we creating a legacy or a burden by passing the agricultural operation to our heirs?? Do we want to pass the family farm/ranch business to heirs as an ongoing business or as a group of assets??

Fair vs. Equal Issues of fairness

Topic best suited for couples/family stakeholders Materials/Delivery concessions for Older audiences (paper and digital formats) Circular seating to accommodate discussion Multi-sourcing content Working Lunch – the power of food Role of Extension – objective provider of knowledge Potential Partners – drooling to gain access to participants