1. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Managing for Today and Tomorrow Estate Planning Part One Estate Planning Concepts and Tools

2. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women What is Estate Planning? The overall process of making decisions as to how property is to pass to others, during one’s lifetime, at death or after death.

3. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Everyone… It is not just about money. Unless you are happy with the plan your state has provided. Who Should Do Estate Planning?

4. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Just providing nonbiased educational information. Seek out your own legal council. We Are Not Giving Legal Advice

5. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Who is the Estate Plan for? Is it to pass a business to the next generation? Is it to plan for retirement? Is it to jump start the kids’ ambitions? Is it to avoid taxes?

6. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women What are your most important goals? Individual Family Retirement Business Spiritual Other

7. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Key is to Articulate Goals The parents together The parents individually The on-farm heirs The off-farm heirs

8. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women What to do if spouse dies -  Receive income?  Sell interest?  Participate in management? What to do if both die? What to do if entire family dies? Develop Goals under Various Circumstances

9. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Common Estate Planning Goals Minimize taxes at death. Minimize probate costs and delays. Conserve property during life and after death in accordance with goals. Provide financial security:  Parents in retirement.  Family member with a disability.

10. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Key Areas of Concern Guardian for minor children or adult children with special needs. Providing income for a surviving spouse or children. Management of estate property, assets, investments. Minimization of probate and settlement expenses. Minimization of estate and inheritance taxes. Flexibility. Liquidity for necessary and unavoidable expenses. Gift planning. Continuation and/or transfer of the business.

11. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Put Together a Team of Advisors Start with referrals and interview potential advisors  Accountant  Banker  Insurance agent  Investment advisor  Lawyer  Financial Planner http://www.extension.iastate.edu/ agdm/wholefarm/pdf/c4-61.pdf

12. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Determine what you own and how much it is worth. Who do you want to receive your bounty? When do you want them to get it? Review any past estate planning. Review of family insurance program. Advisability of lifetime gifting. Getting Started http://www.extension.iastate.edu/agdm/info/eyep/c4-57.pdf

13. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Important Considerations Type of Assets  Inventory  Depreciable o Machinery & Equipment o Permanent Improvements  Real Estate o Land o Personal Residence Tax Basis Alternative forms for disposing of property during life

14. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Fair Market Value of Real Estate You may be pleased! May be one of your greatest stores of wealth.

15. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Ownership / Control Fee simple Life estate or life tenants Remainder interest. Leaseholds Tenants in common. Joint tenants with right of survivorship.

16. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Forms of Co-ownership Tenancy in common: Each tenant holds an undivided interest in the property. Upon a tenant’s death, the interest passes in accordance with the tenant’s will (or state law if no will.) The decedent’s estate includes only the decedent’s interest.

17. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Forms of Co-ownership Joint tenancy: Passes by survivorship designation. Precludes use of life estate/remainder arrangement as to non-marital portion of the estate. Magic words of conveyance. Takes precedence over the will.

18. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Forms of Co-ownership Tenancy by the entirety (not allowed in all states): Husband and wife can together convey a fee simple but neither can unilaterally sever the tenancy. States may have other forms of ownership as well.

19. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Estate Planning Implications of Property Ownership Forms Spousal joint tenancies:  The property is treated at the first death as belonging 50% to each spouse for federal estate tax purposes.  “Fractional share” rule.

20. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Estate Planning Implications of Property Ownership Forms Non-spousal joint tenancies:  Property is taxed in the estate of the first to die except to the extent the surviving owner proves contribution for its acquisition.  “Consideration furnished” rule.  Property included in decedent’s estate receives a new basis at death.

21. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Class Activity Find the Legal Terminology Vocabulary Matching Exercise and complete

22. Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Homework Assignment Find “Last Will and Testament”. Find ten of terms listed in the Activity Worksheet in your will. Check the titles on all real estate to see how it is owned. Review the Estate Planning Questionnaire found in the book.