' /> A Case of Unequal Transfer to Active and Inactive Children

 
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Leave a Legacy

RSS By: Kevin Spafford, Legacy Project

Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project.  He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.

A Case of Unequal Transfer to Active and Inactive Children

Jun 29, 2010
From Legacy Moment eNews (June 25, 2010)
Please join us for future issues, delivered via email each Friday.

John S. owns 100% of a C corporation that operates a very successful farming operation. John is a widower with four children. His oldest son, Jason, is a full-time employee of the operation. His other three children, Jane, Ken, and Julie, work outside the operation and are not involved in the business. John would like Jason to receive his full interest in the business, and he wants to provide each of his children with an equal share of his estate.

His assets consist of the following:

Cash
$ 300,000
Investment in business
2,500,000
Other investments
900,000
Total assets
$ 3,700,000

A review of John’s assets shows it will be difficult to accomplish both of his goals. Not considering estate taxes, Jason would receive assets with a fair market value of $2.5 million, while the other children would split $1.2 million (or receive only $400,000 in cash and other investments each).

Sound familiar? This is the crux of equal versus fair succession conundrum. Most farmers and agribusiness owners struggle with this planning puzzle. There are options available and tools to help you work through this issue.

Watch for constructive settlement methods in coming Legacy Moments.

News & Resources for You

Fair vs. Equal Planning Tool: 
The decisions involving your children may confound your best intentions. Use this tool for exploration and to generate discussion.

Follow the Legacy Project on Facebook: Sign in and see photo albums of our case study families.

Leading the Change – Legacy Project Workshops
The next series of Legacy Project Workshops are scheduled for Lincoln, Neb., on July 20; Des Moines, Iowa; on July 21 and Champaign, Ill., on July 23. Sign up online or call the Farm Journal Events Hotline for more information: (800) 909-3681.

 

 

    

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