Brockett’s Ag Advice
£sT£fl By John E. Brockett
Farm Management Agent
Lewistown Extension Office
Estate Planning 111
Last week we explored 3 solution
to Mr. and Mrs. Farmer’s estate
plan dilemma. Let’s look at some
more.
Solution #4 - will the farm assets
and debts to one child. Will all
other assets to the other three
paying particular attention to the
school child’s eductional needs.
Now what? This one appears to be
pretty good if the three agree to the
one getting the bulk of the estate.
I. Use valuation is a viable tool
here, the school child is taken care
of so what could go wrong? Well
the child getting the farm may sell
it, gamble it away, lose it by
borrowing heavily against it, or*
lose it thru divorce. Wow! Such a
black picture - perhaps we should
go back to the start. Just joking.
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2. Perhaps the parents should
put some stipulations into the will
such as (a) no resale for 20 years,
(b) or in event of a sale a share of
the profit goes to other children,
(c) liens against the farm could not
exceed a certain level, or (d) the
one receiving the farm to give the
other children a non interest
bearing note due upon sale of the
farm.
Solution #5 - have parents own
everthmg as tenants-in
common. The first one to die could
will their share to the child staying
on the farm. The second one to die
could will their share to the other
children with a stipulation that
they must sell to the one running
the farm. Other assets would go to
the surviving spouse to pay off
debts and invest. That person
* p
rs
t A
State
Freeze Proof Waterers
Bethel, Pa. 19507
could leave her share of non farm
assets to each child in equal
shares. Now what could happen?
1. Estate and inheritance taxes
will be greater for the estate of the
first one who dies under this plan
than for the other. If values are no
larger at the tune of death than
those listed in the example, the
total tax would be $13,500 ($0
Federal estate lax ana sl3,duo i'a.
inheritance taxi vs more in
previous 4 plans.
2. The one remaining on the farm
would have to rent from, form a
partnership with, or rent to the
remaining parent. This would be
the way the remaining parent
would receive an income.
3. Depending on how close the
parents deaths occurred to each
other, there could be a problem for
the farming child m purchasing the
other children’s share. Perhaps
the parents should stipulate a tune
period such as ten years.
Other solutions - due to the
unique situation of each farm
family Jhere may be many other
viable solutions. Some of them
would probably be better than all
of the previous 5. A number of
young children may call for a
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trust. 11 the family has a true
desire to will an equal dollar
amount to a family, the parents
may have to purchase additional
insurance. Or the family may
decide to combine parts of several
of these solutions.
Estate planning is just as im
portant for farm families today as
it has ever been. The estate tax
problem has been relieved to some
extent. However those working
with estate planning must consider
estate taxes, inheritance taxes,
HARRISBURG
sylvama’s April egg production
totaled 383 million, according to
the Pennsylvania Crop and
Livestock Reporting Service. The
average number of layers on hand
during April was 17.8 million. Egg
production per 100 layers was
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Lancaster Farming, Saturday, June 4,1983—E1l
Summary
Egg production reported
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and income taxes. They also must
consider family goals, feasibility
of various business relationships,
possible divorce, and the age of the
heirs. Finally they must explore
alternative solutions that temper
the desire to reduce taxes with the
overall needs of the family and the
fact that there is no more farm
land being made.
1 have mimeographs on Wills -
questions and answers on wills;
Property Transfer - gift, sale
inherit; Property Ownership -
advantages and disadvantages of
jointly owned property.
2,155.
The nation’s laying flocks
produced 5.59 billion eggs during
April 1983. The number of layers on
hand during April 1983 was 274
million. Egg production per 100
layers during April was 2,042.
Penn-
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