“Transferring the Farm in a High Stakes Era” Trisha Wagner Jackson County UW-Extension Agent Maria Bendixen Clark County UW-Extension Agent National Farm Business Management Conference June 2010

Transferring the Farm in a High Stakes Era “A generation ago….. Passing on the family farm was a straightforward process. More often than not, a farmer could draft a will to transfer ownership to his children. We are now facing serious questions about whether the family farm can be passed down from today’s owner to the next generation.”

Objectives Help producers discover how to address major issues that can lead to failure in a multiple generation farm business. Provide the tools to develop a business plan. Make producers aware of the tax consequences of transferring the farm. Address common business arrangements, issues, concerns and questions. Provide guidelines for honest open communication of goals and ideas about the farm operation and the transfer.

Why was the program developed Over the last several years individual county agents had been hosting well attended farm transfer workshops. By offering these more regionally more resources could be used to bring in top notch information, and experts.

Program development and delivery Marketing and management group material and tools used as a base Annie’s Project format used as a guide Designed specifically for a multi-generational audience Include communication segment

Program Topics: Selecting the Farm Business Arrangement that Works for you. Pros and Cons of the following business arrangements.  Sole Proprietorship  Partnership  LLC/LLP  S-Corporation  C- Corporation

Program Topics: Tax considerations for farm transfer Information on Wisconsin and federal tax laws that affect farm transfer including:  Ordinary income tax  Capital gains tax  Estate tax  Gift tax

Program Topics: Dealing with the 5 D’s Strategies to plan for the 5 D’s  Death  Disability  Divorce  Debt  Disaster

Program Topics So you want to farm (looking at the numbers) Basic business planning for the next generation:  What does it take to get started?  What do I need to live on?  What can I reasonably expect to make?

Program Topics: Financial Considerations for Retirement Future costs of health care? What do you need to live on? Can insurance cover some costs? What can I get from the farm?

Program Topics: The importance of Communications in Farm Succession Communication between generations:  When (set up formal meetings)  How (I statements, goal setting)

Participants 242 total participants  60% Transferring generation  40% Generation to be transferred to

Evaluation Summaries

Follow up Meetings in the Local County With the large group sizes the ability to ask farm specific questions was reduced. Follow up meetings were held with out Ag law specialist so that farm specific questions could be addressed. The follow up meetings allowed farmers to get connected with their local county agent who could facilitate more discussion about the farm transfer.

Where do we go from here or what is the future of this program? Individual meetings with families Follow–up survey for participants  What are your goals?  What steps have you taken to meet them?  What resources do you need to meet them? Factsheets:  Meeting with your lawyer: what to prepare.  Basics of the Will.

Thank You! Trisha Wagner- Jackson County UW-Extension Agriculture Agent Maria Bendixen- Clark County UW-Extension Dairy and Livestock Agent