Farm Transition & Estate Planning
Programming:
Participant Behavioral Change,
Cumulative Outcomes & Impacts
2004 - 2010
Gary A. Hachfeld
Extension Educator – Ag Business Management
NCRME Conference
St. Louis, MO.
April 11-13, 2011
Program Goals
• Introduce farm/ranch families to business transition
& personal estate planning laws, rules,
terminology, 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.
Delivery, Materials & Marketing
• Face-to-Face workshop setting – PowerPoint slides
• Workbook:
- PowerPoint slides
- 26 detailed information sheets
- Participant worksheets
- Internet resources
• “Sponsorship Model”
- Market to local business sponsors
- Sponsor pays us a program fee; selects date, time,
location; recruits participants; pays all additional costs.
Program Outline
• Topics discussed:
- Preparing to transition the farm/ranch business (goals)
- Tax considerations
- Overview of business transition strategies
- Financial considerations
- Estate planning issues
- Treatment of heirs
- Financial assistance
- Developing a written transition plan
Program Evaluative Process
• 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.
• 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.
Participant Demographics
2004 - 2010
• Programs delivered in MN, ND, IA, & WI.
• 3,258 total attendees
• 1,537 farms/ranches represented
• 1,031 local communities represented
• 138 local program sponsors involved
• 84.5% had no business transition plan
• 69.6% had no personal estate plan
• Age range: 22 to 89 yrs., 58.1% over age 55
• 62.3% male and 37.7% female
End-of-Meeting Evaluation
Cumulative Results
2004 - 2010
Participant’s Self-Reporting Whether Their
Understanding of Educational Points Increased Due to
Attending a Workshop (2004 – 2010)
Median
Score
Average
Score
Standard
Deviation
% Indicating
“Strongly Agree”
Or “Agree”
Understanding of the need for clear
goals & communication in the
transition process.
5
4.52
0.52
99.1%
Greater understanding of strategies
available for use in the transition
process.
4
4.28
0.53
95.6%
Importance of assessing the financial
strength of the business before the
transition.
5
4.45
0.58
93.9%
Greater understanding of tax issues
related to the transition process.
4
4.20
0.62
88.3%
Greater understanding of personal
estate planning issues.
4
4.25
0.61
93.8%
Educational Points
Used Likert Scale with 1 = “Strongly Disagree’ to 5 = “Strongly Agree”
Follow-up Evaluation
Cumulative Results
2004 - 2010
Percent/Number Farm/Ranch Units
Starting/Completing Business Transition & Personal
Estate Plan (2004 – 2010)
2004-05
(MN)
2005-06
(MN)
2006-07
(MN)
2007-08
(MN, ND,
IA, WI)
2008-09
(MN,
ND, IA)
2009-10
(MN,
ND, IA)
Total
Businesses
Started Business
Transition Plan
58.8%
(37)
59.4%
(57)
61.8%
(84)
72.9%
(77)
67.2%
(65)
68.5%
(63)
383
Completed &
Implemented Business
Transition Plan
11.6%
(7)
12.5%
(12)
12.2%
(16)
15.7%
(16)
22.2%
(21)
27.0%
(17)
89
Started Personal
Estate Plan
56.9%
(35)
57.3%
(55)
67.2%
(92)
79.2%
(83)
70.2%
(68)
65.2%
(60)
393
Completed &
Implemented Personal
Estate Plan
6.5%
(4)
7.3%
(7)
14.4%
(19)
17.1%
(18)
23.4%
(22)
26.7%
(16)
86
Years/States
Task
Asset Values
for
Economic Impact
Cumulative Results
2004 - 2010
Average Asset Values
Farm/Ranch & Non-Farm/Ranch Assets by Year
(2004 – 2010)
Average
Asset Values
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
Business
Assets
$1,147,163
$1,277,059
$1,401,775
$1,475,454
$1,680,086
$1,689,609
Non-Business
Assets
$144,561
$160,240
$173,344
$169,737
$172,990
$187,714
Data Source: 1- FINBIN Data Base, Center for Farm Financial Management, U of M , St. Paul, MN.
2- Iowa State University Farm Business Summary
Economic Impact
Cumulative Results by Year
2004 - 2010
Economic Impact
Due to an Orderly Process for the
Transition of Farm/Ranch & Non-Farm/Ranch Assets
Asset Type &
Totals
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
Business Assets
$8.0 mil
$15.3 mil
$22.4 mil
$23.6 mil
$35.3 mil
$28.7 mil
Non-Business
Assets
$0.6 mil
$1.1 mil
$3.3 mil
$3.1 mil
$3.8 mil
$3.0 mil
$8.6 mil
$16.4 mil
$25.7 mil
$26.7 mil
$39.1 mil
$31.7 mil
Total Business
& Non-Business
Assets
$148.2 Million Dollars
Program Impact
Based Upon Having Implemented
An Orderly Process For
Asset Transition To The Next Generation
What Have We Learned?
◘ Program demand continues to grow.
◘ “Sponsorship Model” works well for us.
◘ “Sponsorship Model” has strengthened our working
relationships with local businesses, leading to other
opportunities.
◘ 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).
Contact Information
Gary A. Hachfeld
Extension Educator
Agricultural Business Management
University of Minnesota Extension
507-389-6722
hachf002@umn.edu
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