Fine Tuning your
Succession and Estate
Plans
Presented February 11, 2016
15th Annual MidAtlantic Women In Agriculture Conference
Lisa S. Hastings, CPA

Director of Operations

Partner

Estate Planning Thought Leader

Delaware Farm Kid
Succession
Plan
Estate
Plan
Succession Planning
Do I really need a
succession plan?
My kids LOVE each
other!
•
Beware of “Artificial
Harmony”
•
Right now, you’re there
to keep the peace
•
Are there difficult issues
not being discussed?
No plan?
•
No infrastructure.
•
No guidance for future
generations.
Who’s driving this
thing?
•
Somebody has to be in
charge
•
Not always the oldest
•
Skill set is key:
•
Communication
•
Organization
•
Commitment
•
“Thick Skin”
Who’s driving this
thing?
•
Needs to be someone
most of the family trusts
•
Willing and able to hold
others accountable
Who’s driving this
thing?
•
May need both “Good
Cop” and “Bad Cop”
•
Outside professionals
can assist with “Bad
Cop” role
•
“Good Cop” MUST be
from within the family.
Everybody In
•
Everyone gives up the
“right to remain silent”
•
Identify Commitment vs
Support
•
Consensus = majority
committed and the rest
agree to support
ULTIMATE GOAL
•
What is the “ultimate goal” of
your succession plan?
•
Be honest with yourselves
•
This will define your
priorities and choices in
the next steps
•
Need to reach consensus majority commit and
remainder support
Putting the Success in
Succession Planning
•
Define Success & communicate
the expectation
•
•
Success is not perfection
Shoot for success at a level 8
on a scale of 10
•
Most people get most of
what is important to them
•
Don’t allow focus to linger
on what’s not perfect
Dirty Little Secret
•
Succession planning is really
just part of ongoing business
management
•
Take small bites if that’s easier
on the family
•
Consider one or more of the
following, if you’re not already
doing them…
SWOT Analysis
•
See if group can reach a
consensus of top 3 items in
each category
•
Helps to define action items
•
“Leadership Succession”
will naturally appear on the
list at some point, and then
it can be seen as a priority
by the group
Job Descriptions
•
•
Draft Job Descriptions, including:
•
Educational Requirements
•
Responsibilities
•
Required Skills/Licensing
Use these descriptions to hold members accountable
and as a basis for compensation.
Begin to Decentralize
Decision-Making
•
Begin to prepare next generation leaders with handson responsibilities of management by letting them
participate in or take on special projects:
•
Negotiating leases
•
Navigating Health Insurance
•
Researching potential new initiatives: agri-tourisim,
technology, etc.
Estate Planning
Start at the Beginning
•
Personal Financial Statement
• Current Value of Assets
• How Assets are Titled is
Important
•
•
Individually, Joint, in
Partnership or Business
Name
Remember to Include
•
Life Insurance Policies
•
Retirement Plan Assets
•
Your Home, Farm, and
Other Real Estate
What can a trust do?

Direct use of funds, provides some control after death
 Can provide assets gradually to children rather than all at once
 Can benefit multiple generations
 Can specify how the funds will be used – education fund, for instance


Trustee oversees execution

Can be useful if the family member is not able to manage for themselves

Trustee is a big job – select person based on job requirement and their skill set

A trusted advisor can also act as a co-trustee or successor trustee
Be careful of the assets you put in place.

Are they income-producing or might they be a burden on the beneficiary?

Consider providing liquid assets in tandem with real estate
Important Instructions
•
1.
2.
3.
4.
5.
6.
7.
Create this list, update it annually, and
make sure your trustee(s) and executor(s)
know where it’s kept:
Advisors’ names and addresses
Asset information and location, including
copies of beneficiary designations
Locations of all estate documents
Location of all business and other contracts
Location of safe deposit boxes and keys for
entry
Passwords and access information for all
technology and online accounts
Instructions for specific/other wishes re:
heirlooms, jewelry, pets, your obituary, etc.
Other ways to provide for your
loved ones
•
Gifts during your lifetime are an alternative to naming in your
will or placing in trust:
•
Gifts of family business ownership can be discounted when
giving minority shares
•
Gifting real estate? Consider placing into LLC(s) which can be
gifted over time
•
There’s no step-up in basis, but that may not be the primary
concern for assets that are not intended to be sold
Other ways to provide for your
loved ones
•
Charitable Giving:
•
Charitable Gift Annuities provide a remainder
income during your lifetime
•
You can create memorial or endowment funds
that live on as a legacy
•
Gifts of appreciated assets have an extra tax
advantage – you get the deduction for the
current value of the gift without having to
recognize the gain
Other ways to provide for your
loved ones
•
Reasons to Consider Life Insurance:
•
If your assets are mostly real estate (or otherwise not liquid)
and you don’t want them sold, your heirs may need life
insurance to cover taxes and/or carrying costs
•
If you have young children, you may want life insurance to
compensate for your earnings that would have provided for
their education and welfare until they are adults
•
If you believe your estate will be taxable, consider an
irrevocable life insurance trust (ILIT). Proceeds can escape
estate taxes and provide $$ to pay the estate taxes
Plan as best as you can for known or reasonably
possible scenarios, but don’t overthink!
Thank you!
If you would like more information on any of the following topics,
please contact me.
Succession Planning
Estate Planning
Strategic Tax Planning
Lisa Snow Hastings, CPA
Cash Flow Management
Record Keeping Strategies
QuickBooks Support
302-674-4305
lsh@fawcasson.com