Impact of New England
Transfer the Farm Program
Workshops
Presented at the 2009 National Extension Risk
Management Education Conference
Reno, NV March 31-April 1, 2009
Bob Parsons
University of Vermont
Mike Sciabarrasi
University of Vermont
Demand – Program Addressing
Regional Education Needs on
Farm Transfer/Transition Issues
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All New England States
Aging farmers on small farms
Complicated by high real estate values
Regional concern 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 – Vermont,
and Maine
• Cooperating attorneys
• Bottom line: One state could not do the
program alone!
What Did We Do 2005-2008?
• Conduct 26 workshops for 792
participants in 6 New England states
– 15 TTFI for 511
– 9 TTFII for 244
– 2 TTF II for 37
• Met individually with 85 farm families
• Provided financial support for 21 families
Workshop Agenda for “Transfer
The Farm I” Workshop
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Communication and setting goals
Retirement, estate & business basics
Nuts & bolts – Legal aspects & methods
Creative alternatives
– Land Link, Conservation Easements
• Farm panel – their experience
• 1 day, 9-3:30
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
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!
• Leave lots of time for Questions!
First Hand Experience
• 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
• Get success and horror stories
• Gives courage to move forward
Transfer The Farm II – Farmers
Wanting Business Transition
• Retirement income
• Medicaid and farm ownership
• Compare business organizations
and trusts
• Ingredients of a business agreement
• Conclude with a decision case
Medicaid and Health Issues
• Long term care “scares the hell out of folks”
– Will we have to sell the farm to pay the home?
• Medicaid complicated and changing yearly
• Long term care insurance? Affordable?
• Issue garners great attention!
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
Key Points of Interest on LLC
• Key elements folks want to know:
– Protect against divorce
– Maintaining and handing over control
– Including non-farm heirs but no control
• Passing ownership through the LLC
• Does it really protect against liability?
So What Were the Results???
• Sex: 53% male, 47% female
• Age well distributed:
– 10% < 35, 25% >65
– 30% age 56-65, 34% age 36-55
• 61% sole proprietor, 19% partnerships
– 20% LLC, Trust, Corp
• 71% have retirement account
What Done in Previous 5 Yrs?
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13% had done NOTHING
27% written or updated a will
33% attended another workshop
69% discussed with family
39% met with professional on issues
32% had met with ag professional
13% altered business to include children
People Liked the Programs
• 95% Satisfied with the workshops
• 98% Satisfied with workshop organization
• Family Communication turned out highest
rated section
• Legal Aspects 2nd – folks liked the lawyers!
• Creative solutions least popular
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%
Health and Medicaid - 5% to 85%
Business Agreements – 9% to 90%
Note: on a scale of 1 to 5, answer 4 or 5
Follow-up Program with
Workshop Participants
• Set up farm visit with farmers
• Offer aid for professionals (lawyer, acc’t)
– Provide $150 stipend
• Met with 85 families 2005-2008
– Across New England
– By 5 participating extension and 2 non-profit
collaborators
Follow-up Meetings
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Each situation was unique
Topics widely varying
Met at home or extension office
Offered follow up professional assistance
– Odd – only 21% took professional offer!
– Others did use professional help
– Some did not move forward
What Have Participants Done
Since Workshop?
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Survey – 56% return
72% files or updated will
70% have reviewed deeds
62% have discussed process with family
47% had determined basis with tax advisor
18% set up planning entity (LLC, trust)
So What Have We Learned?
• Issue “ain’t goin’ away” as farmers
average age gets older
• Workshops work to get issues covered
• Clientele want one-on-one consulting
– Fear of not knowing exactly what to do
• Greater need “out there” but not reached
– Lenders, others identify folks needing help
Issues for Extension
• Declining Extension Resources
– Can we put time into one-on-one?
– How much effort to one family?
• Declining meeting attendance – do different?
• Addressing those in need but not reached
– Innovative thinking needed
– Technology - but older folks don’t use internet
• How to include professionals/others?
Questions?
Thank You!