Yei, Say« local Banker, and He Tells Whys
Does a Farmer Need Estate Planning?
Editor’s note: The following
article, explaining why estate
planning is so important, was
forwarded by Richard J. Ashby
Jr, trust officer of The First
National Bank of Strasburg.
At one time or another in our
lives, all of us get the uneasy
feeling that perhaps we have not
planned adequately for our
family’s security after we are
gone.
Most of the time, however, we
think “Estate planning
that’s for rich business men! I’m
a farmer I can’t afford estate
planning! Besides, a farmer
doesn’t really need it, does-he?
After all, my farm is only 80
acres and all I own is some
equipment, some livestock and
not much else.”
The Typical Farm
This typical farmer has a farm
worth about $112,000, equipment
worth $20,000, livestock worth
$20,000 and other miscellaneous
assets worth $lO,OOO Most of his
assets are in joint name with his
wife Does he really need estate
planning 7
Examine his estate $40,000 is
his alone; $122,000 he and his wife
own jointly.
As a beef operator you're interested in maximizing
your profit picture. You're looking for new ideas, new
methods and new innovations that will help “beef up"
your profit. Here's a program worth looking into. It’s
called "Van Dale Systems Feeding.” It starts with
maximizing your production of total digestible nutri
ents with increased haylage and silage. This permits
the best use of your land and cattle coupled with a
fully mechanized feeding system. Van Dale has the
equipment and know-how for maximizing profits
through mechanized feeding
FORAGE BOXES
So let's bring it in from the field with a Van Dale
Forage Box. These rugged built units are
equipped with exclusive auger-type "beaters”
that deliver all kinds of forage under all kinds
of conditions. No clogging at the blower, as
the forage is metered between the augers
—not over the top!
SILAGE DISTRIBUTORS
Van Dale distributors insure even
silage distribution throughout
the silo for a maximum fill
The 1640 Power-Fit’s unique
revolving deflector plate
diverts the explosive force
of incoming material and
spreads it evenly in a con
tinuous sweeping pattern
to the wall. The 538 oper
ates in an elliptical
motion, directing forage
to the outside walls of
the silo. Varied spout
rotation speed allows for
even fills
SILO UNLOADERS
There’s a Van Dale unloader for
every feeding application. These high
performance twin-auger units can handle
virtually any silage or haylage under the most
adverse conditions... frozen, gummy or what
have you, and do it fast. The 1230 has been
customer-certified in the field to outperform,
and outlast any make its size. For hard work in
smaller silos there's the 1020 F. The Industrial is
built for silos from 20 to 40 feet in diameter and
has a capacity up to 40 tons per hour.
At his death his estate will owe
about $4,000 in estate and
inheritance taxes. When his wife
dies, her estate will owe ap
proximately $30,300 in estate and
inheritance taxes. How will these
taxes be paid’ The answer is that
his farm (or a portion of it) will
have to be sold just to pay taxes.
What Is Estate Planning?
How can farm estate planning
help this farmer’ To answer this
question we must understand
what estate planning is and what
it can do
Planning is an essential
element of everyone’s life pat
tern It means that one devises or
projects the achievement of some
goal
You do this with your income
by budgeting in order to pay bills.
You plan for the planting and
harvesting of crops, the pur
chase, use and sale of equipment
and many other farming goals.
The objective of this business
planning is to provide an orderly,
secure and profitable business
result.
Farm estate planning en
compasses the same objectives
How does farm estate planning
provide you with security, cash
Non-Stop Feeding
VAN PALE
Box 337 • Long lake, Minnesota
savings and orderly
management? The experienced
estate planner (your bank trust
officer, attorney or underwriter)
aids you in formulating your
objectives, some of which are not
always clear to you without some
probing questions
Planning includes the
estimation of estate taxes and
taking steps to minimize those
taxes, thereby increasing your
net estate
Planning also includes taking
steps to insure that cash to meet
expenses is readily available,
reducing administration costs,
providing asset management and
converting estate values
Finally, periodic review is
assured by choosing an estate
planner who is sincerely in
terested in your problems and
their solution.
Cash Problems
The typical Lancaster County
Farm Estate is composed largely
of land. Land values in Lancaster
County have increased rapidly
and continu to forge upward
On the other hand, the farmer’s
income and ultimately his cash
picture, have not kept pace with
low estate liquidity results in a
CALEB M. WENGER
Drumore Center, RDI Quarryville, Pa.
Phone 548-2116
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high death tax to the farmer’s
estate with little or no ready cash
to pay the bills.
And remember—Uncle Sam
gets paid first—before estate
distribution can be made to heirs
An effective estate plan can
often help solve this perplexing
problem.
Joint Property Dilemma
Holding the bulk of farm
property in joint names (husband
and wife) is a well established
custom with farmers in Lan
caster County It is easy and
effects immediate transfer at the
death of one spouse It imposes no
Pennsylvania Inheritance Tax at
the death of the first spouse
But, because of the high value
of farm estates, jointly held
property often is subject to
double taxation by Uncle Sam in
the Federal Estate Tax in -
addition to the Pennsylvania
Inheritance Tax
The federal tax is a graduated
tax which often imposes a higher
tax/ate than the Pennsylvania
Tax
The simultaneous death of both
joint owners poses difficult and
crucial problems
Proper estate planning is the
BULK STORAGE BINS
Supplementary feeds are easily
handled with Van Dale's bulk stor
age feed bi ns. Th e Super Stores a re
available in 4Vfc or 7 x h ton sizes.
These units are fiberglas con
structed . They won’t rust, dent, cor
rode or absorb heat from the sun.
CONVEYORS
Whether straight-out, incline, au
ger or chain, Van Dale conveyors
fit most any automated feeding
system. The SCCI4OO Cham Con
veyor is Van Dale’s highest capacity
conveyor. It handles all rations—
safely. The CT 2OO and 300 auger
type conveyors are adaptable to
any feeding system. They’re
tough, efficient, easy to install
\d economically priced.
BUNK FEEDERS
Van Dale has a bunk feeder for every
operation. The SCF 1400 Traveling
Bunk Feeder is a single chain unit
that will carry and feed virtually
everything. The Mammoth 14
Multi-Feeder is an augertype de
signed especially for multi-lot
operations. The 934 and 1234
Auger Bunk Feeders are the
sturdiest, smoothest operat
ing, lowest cost feeders ever
produced. Then, there's the
stainless steel Shaker Feeder.
A combination feeder and
bunk designed for single
lot operations.
Van Dale Systems Feeding
comes down to one word ...
efficiency. Van Dale offers var
ious models and sizes of feed
ing equipment to most effici
ently match the needs of every
feed lot layout... old or new,
large or small. Check with your
Van Dale dealer to see what
you need to maximize your
profits. And ask him about
Van Dale's new agri-leasing
program.
Lancaster Farming, Saturday, January 1,1972
type chicks produced in the state
last month or 14 per cent above g
v -*year'a'gor
key to finding methods to reduce
the tax burden and solve the joint
property dilemma.
Transfers to Children
A popular objective of many
farmers is to pass the farm along
to children Usually, however,
the farmer desires to treat his
children equally This desire,
certainly a commendable one,
has caused farms to be split and
divided until their eventual small
size makes them only marginally
profitable
Usually the children do not
have sufficient wealth to pur
chase the farm without mor
tgaging it The burden of this
extra debt often forces sale of the
farm
These difficulties can often be
eliminated by proper planning of
the estate
Planning Tools
There are many tools used by
the estate planner to solve his
client’s problems
For very large or prosperous
farms incorporation offers ease
of distribution, sale, transfer, as
well as income tax advantages
and pension and profit sharing
possibilities
Family partnership offers
another attractive solution for
the medium size or smaller farm
It offers ways of passing the farm
on to the farmers’ children more
easily and smoothly
Where the farmer desires it,
life insurance provides needed
liquidity and immediate funding
for a buy sell agreement
The Marital Deduction Trust is
a useful estate planning tool to
help in reducing the tax burden
and provide flexibility in the
estate
Planning Is the Key
Remember that the key to the
solution of the problems outlined
above and many others as well is
planning
The planning must be done
while there is time, preferably
before you reach retirement
Your bank trust officer can aid
you in this planning—he is a total
financial planner
In the planning process various
documents may be suggested as
necessary, these documents
include wills, trusts, deeds, in
corporation papers, partnership
agreements or buy-sell
agreements These are the tools
for doing the work of a good
estate plan They should be
planned by experts and drafted
by experts
In the long run, proper farm
estate planning proves to be more
profitable and beneficial to you
and your family and gives you the
security and peace of mind you
deserve
Pa. Poultry
Output Is Up
Pennsylvania laying flocks last
month produced 302-milhon eggs,
an increase of 10 per cent from a
year earlier but a decrease of two
per cent from the previous
month, the Pennsylvania Crop
Reporting Service said recently
Rate of lay for December 1 is
slightly below the previous
month, but seven per cent above
December l, 1970.
Average price received by
producers for all eggs was 30
cents on November 15 This price
was five cents below a year ago,
but one cent above last month.
Pennsylvania hatcheries
produced 1 9-million egg-type
chicks last month or 11 per cent
above a year earlier.
There were 6 8-milhon broiler-
9