1. Copyright © 2013 University of Minnesota. All Rights Reserved Multiple Year Farm Transition & Estate Planning: Program Outcomes & Impacts Through Evaluation Gary A. Hachfeld Extension Educator - Ag Business Management Triennial Conference Overland Park, KS. June 9-13, 2013

2. Copyright © 2013 University of Minnesota. All Rights Reserved Program Goals Introduce farm/ranch families to business transition & personal estate planning laws, rules, terminology, risk management issues, 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.

3. Copyright © 2013 University of Minnesota. All Rights Reserved Delivery, Materials & Marketing Face-to-Face workshop setting – PowerPoint slides Workbook: - PowerPoint slides - 27 detailed information sheets - Participant worksheets - Internet resources “Sponsorship Model” - Market to local business sponsors - Sponsor pays U of MN a program fee. Sponsor selects date, time, location, recruits participants, pays all additional costs.

4. Copyright © 2013 University of Minnesota. All Rights Reserved Program Outline Topics discussed: - Preparing to transition the farm/ranch business (goals) - Tax considerations & risk management issues - Overview of business transition strategies - Financial considerations - Estate planning issues - Treatment of heirs and intergenerational communications - Financial assistance - Developing a written transition plan

5. Copyright © 2013 University of Minnesota. All Rights Reserved Evaluative Methodology Stage 1: 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. Stage 2: 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.

6. Copyright © 2013 University of Minnesota. All Rights Reserved Participant Demographics 2004 - 2012 Programs delivered in MN, ND, IA, & WI. 5,069 total attendees 2,503 farms/ranches represented 1,381 local communities represented 222 local program sponsors involved Total number of workshops - 134 84.9% had no business transition plan 69.3% had no personal estate plan Age range: 22 to 89 yrs., 56.3% over age 55 60.6% male and 39.4% female

7. Copyright © 2013 University of Minnesota. All Rights Reserved End-of-Meeting Evaluation Cumulative Results 2004 - 2012

8. Participant’s Self-Reporting Whether Their Understanding of Educational Points Increased Due to Attending a Workshop (2004 – 2012)* * Used Likert Scale with 1 = “Strongly Disagree’ to 5 = “Strongly Agree” Educational Points Median Score Average Score Standard Deviation % Indicating “Strongly Agree” Or “Agree” N Understanding of the need for clear goals & communication in the transition process. 5 4.52 0.53 98.9% 2755 Greater understanding of strategies available for use in the transition process. 4 4.25 0.55 93.8% 2755 Importance of assessing the financial strength of the business before the transition. 4 4.37 0.58 96.3% 2755 Greater understanding of tax issues related to the transition process. 4 4.20 0.63 89.8% 2755 Greater understanding of personal estate planning issues. 4 4.29 0.59 91.8% 2755

9. Copyright © 2013 University of Minnesota. All Rights Reserved Follow-up Evaluation Cumulative Results 2004 - 2012

10. Number/Percentage of Farm/Ranch Units Starting/Completing Business Transition & Personal Estate Plan (2004 – 2012)* Years/States Task 2004-06 (MN) 2006-07 (MN) 2007-08 (MN, ND, WI, IA) 2008-09 (MN, ND, IA) 2009-10 (MN, ND, IA) 2010-11 (MN) 2011-12 (MN) Total Number Businesses Started Business Transition Plan 94 (59.1%) 84 (61.8%) 77 (72.9%) 65 (67.2%) 63 (68.5%) 85 (78.0%) 204 (70.6%) 672 Completed & Implemented Business Transition Plan 19 (12.1%) 16 (12.2%) 16 (15.7%) 21 (22.2%) 17 (27.0%) 27 (31.8%) 63 (30.9%) 179 Started Personal Estate Plan 90 (57.1%) 92 (67.2%) 83 (79.2%) 68 (70.2%) 60 (65.2%) 83 (76.1%) 226 (78.2%) 702 Completed & Implemented Personal Estate Plan 11 (6.9%) 19 (14.4%) 18 (17.1%) 22 (23.4%) 16 (26.7%) 26 (31.3%) 83 (38.1%) 195 * Number & Percentage of Those Returning Follow-Up Evaluations Only.

11. Copyright © 2013 University of Minnesota. All Rights Reserved Asset Values for Economic Impact Cumulative Results 2004 - 2012

12. Average Asset Values Farm/Ranch & Non-Farm/Ranch Assets by Year (2004 – 2012) Data Source: 1- FINBIN Data Base, Center for Farm Financial Management, U of M, St. Paul, MN. 2- Iowa State University Farm Business Summary Average Asset Values 2004-062006-072007-082008-092009-102010-11 2011-12 Business Assets $1,136,249 $1,232,898 $1,373,612 $1,723,537 $1,689,609 $1,970,866 $2,139,431 Non- Business Assets $160,859$173,344$197,068$177,904$187,714$205,131 $211,845

13. Copyright © 2013 University of Minnesota. All Rights Reserved Economic Impact Cumulative Results by Year 2004 - 2012

14. Economic Impact Due to Having an Orderly Process for the Transition of Farm/Ranch & Non-Farm/Ranch Assets Asset Type & Totals 2004-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Business Assets $21.6 mil $19.7 mil $22.0 mil $36.2 mil $28.7 mil $53.2 mil $134.8 mil Non-Business Assets $1.8 mil $3.3 mil $3.6 mil $3.9 mil $3.0 mil $5.3 mil $17.6 mil Total Business & Non-Business Assets $23.4 mil$23.0 mil$25.6 mil$40.1 mil$31.7 mil$58.5 mil $152.4 mil

15. $354.7 Million Dollars Program Impact Based Upon Having Implemented An Orderly Process For Asset Transition To The Next Generation

16. Copyright © 2013 University of Minnesota. All Rights Reserved Cost – Benefit Analysis Total program cost 8 year period = $224,099 Includes staff salary & benefits (prep, travel, presentation, & evaluation time), mileage expense, lodging expense and participant materials. Total program revenue 8 year period = $172,099 Includes $93,656 sponsorship fees. Includes $78,443 of grant funds. Net program cost 8 year period = $52,000.

17. Copyright © 2013 University of Minnesota. All Rights Reserved Cost – Benefit Analysis For every net dollar of program cost spent, we generated $6,821 in financial impact ! Rate of Return on Investment was equal to 608,015 %

18. Copyright © 2013 University of Minnesota. All Rights Reserved Cost – Benefit Analysis My next “So What” Question? “What is the public value of this program?”

19. Copyright © 2013 University of Minnesota. All Rights Reserved What Have We Learned? ◘ Is a universal issue regardless of business, location, age, etc. ◘ Program demand continues to grow. ◘ “Sponsorship Model” has strengthened our working relationships with local businesses leading to other opportunities plus enabling us to generate revenue. ◘ 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).

20. Copyright © 2013 University of Minnesota. All Rights Reserved Contact Information Gary A. Hachfeld Extension Educator Agricultural Business Management University of Minnesota Extension 507-389-6722 hachf002@umn.edu

21. Copyright © 2013 University of Minnesota. All Rights Reserved Questions ? ? ? Comments ! ! !