New England Farm
Transfer Workshops
Bob Parsons
University of Vermont
Mike Sciabarrasi
University of Vermont
Demand - Program that Addressed
Regional Education Needs on
Farm Transfer Issues
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Aging farmers
Major concern of 40% of VT dairy farmers
Complicated by high real estate values
Concern in region to preserve farmland
Complex – 2 different issues
– Estate Planning
– Business transition
Result: Regionally Supported Project
• Generously funded by the Northeast
Center for Risk Mgmt Education
• Combined effort and cooperation:
Extension of Connecticut, Maine, New
Hampshire, and Rhode Island
• Land For Good, Land Link – New
England, Vermont, and Maine
• Cooperating attorneys
• Moral: One state could not do the
program alone!
Workshop Agenda for “Transfer
The Farm I” Workshop
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1 day, 9:00 – 3:00
Get the process started
Communication and setting goals
Retirement, estate & business basics
Nuts & bolts – Legal aspects & methods
Creative alternatives
First-hand experience
Introduction Section
• Identify the issues
• “Farm Transfer” is not the issue
• Retirement, health care, business
transition, fair vs. equitable, legal issues
• Use humor to set the tone
• Suggest different transfer plans
“No Plan” Plan
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Not planning to die
Going to take it with you
Intend to go out farming
Never, never, ever discuss with family
Surprise everyone at death!
No concept of “fair.”
UNH and UVM Cooperative Extension, 2006
“I’m Gonna Do
Something Someday”
Plan
• “I know just what I want to do”
• “Someday, all this will be yours”
• “Don’t worry, you will be taken care of”
But nothing is ever written down!
Or old plans never updated!
UNH and UVM Cooperative Extension, 2006
Communication – Important Piece
“Talk” is a 4 Letter Word!
• Speaker – Counselor who concentrates on
farm families
• Stress the need of talking with family
– Not necessarily agreement
• Exercise - Goals of each generation
• Aligning goals with the farm situation
Retirement & Transfer Basics
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View of the issues and considerations
Retirement planning
Health and income needs
Implication of taxes
Methods of transferring assets
Business organizations
Business transitions
Overview but not Detailed…
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Introduce and expose topics
Participants think of their situation
Address “fair” vs “equal”
Quiz questions to generate discussion
Examples and war stories
– What works and what doesn’t
Legal Aspects of Transfers
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Attorney is essential
Opportunity for free legal questions!
Probate, estate, and taxes
Wills, inheritance, & heirs
Protecting assets
Conflict of interest between generations!
Key Points with Attorney
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Need lawyer with ag experience
Speaking ability in “everyday” verbiage
Familiar with state laws
Be careful of fishing for clients
Face it, some lawyers push different tools
Work with lawyer so they know what else is being
presented in the workshop
• Allow plenty of time for questions
Creative Alternatives
• Land Link – bringing in non-family member
• Sell development rights
• Caution – state/trust personnel can really
push easements w/out discussing down side!
First Hand Experience
• Participants scared/confused at this point
• Feel alone, not sure where to turn
• Farmer panel gives hope and confidence
that transfer/transition plan can be achieved
• Folks willing to openly discuss
• Get multiple views
– Parent, child, in-law
Farmer Panel Should Cover…
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What was their situation and goal
What did they do
How did they go about it
How did it turn out for them
Get success and horror stories
Gives courage to move forward
So What Were the Results???
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16 programs in 6 states 2004-2007
667 participants
Age distributed: 10% < 35, 25% >65
53% male, 47% female
61% sole proprietor, 29% partnerships
71% have retirement account
27% wrote/updated will in past 5 yrs
People Liked the Program
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95% Satisfied with the workshop
98% Satisfied with workshop organization
Farmer Panel highest rated section
Family Communication
Legal Aspects – folks liked the lawyers!
Workshop Increased Understanding
of the Issues…
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Communication - from 30% to 88%
Retirement planning - from 25% to 75%
Business transition- from 16% to 77%
Estate planning -from 20% to 80%
Note: on a scale of 1 to 5, answer 4 or 5
Conclusions from TTF-I
• Workshops very effective and popular
• Aids farmers in getting a handle on issues
• But comments left a desire for more…
So what to do next???
Primary Comments…
• People wanted info on
transitions
• Type of business organization?
• What should be in a business
agreement?
• Want details on how to get
started!
Creation of Transfer the Farm II
• For farmers who are ready to “do something”
• Provide more detailed program
• Focus on business transition
Problem was…
What exactly to present and how to present it?
Follow-up visits??
Program Adopted in 2005
• Retirement income
• Medicaid and farm ownership
• Compare business organizations
and trusts
• Ingredients of a business agreement
• Conclude with a decision case
Reference Material for Workshop
• Checklist for ingredients of LLC agreement
• Limitations of LLC
– Does it provide limited liability?
– Preventing “piercing the veil”
• Checklist of post-LLC tasks
Points of Particular Interest
• Key elements of agreement for
– Divorce
– Control
• Passing ownership through the LLC
• Does it really protect against liability
Workshops Since 2005
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9 workshops in 6 states
258 participants – 48% female
28% >65, 14% < 35
97% satisfied with workshop
>90% satisfied with topics
Lowest rated was the cases – 82%
Workshop Effectiveness
• Medicaid greatest area of
interest
• Next–provisions of business
agreements
• 95% say speakers were very
effective
Follow-up Program with
Participants Begun in 2006
• Set up farm visit with farmers
• Cover cost of travel
• Aid contacting professional (lawyer, acc’t)
– Provide $150 stipend
• Goal of 55 throughout New England
– Met with over 40 families
– One perplexing find – people are not asking for
stipend!
So What Have We Learned?
• Farm transfer remains major concern
• Various issues
– Business transition
– Estate planning to reduce taxes
• Need assistance of professionals
• Task complex but can be accomplished
• New England
– Must take regional approach
Conclusion…
There are many ways to get there
But all require on basic step…
…at some point you must stop
procrastinating and put a plan
in action!!!