The pieces of the puzzle finally come together
A simple conversation on a family houseboat trip more than a decade ago served as a springboard for Minich-May farms. With the next gen-eration ready to be involved, Dave and Marilyn Minich knew a comprehensive succession plan and an estate plan were necessary for their daughter, Angie May, and her husband to join the Logansport, Ind., operation.
Dave was happy to provide support and an avenue for Angie to be a part of the family farm, especially since he had not received a warm welcome to join his father decades earlier. Dave’s
father, Ernie, discouraged him from returning to the farm because he didn’t think the farm could support both generations.
Dave wasn’t deterred. "It’s that Minich family resoluteness. Some would call us stubborn," he says.
Ernie and Dave began partnering together in a small hog and row-crop farm, which eventually turned into a full partnership that began growing, slow and steady.
By the early 1980s, Dave began taking on more responsibility and eventually took over the operation. His impressive drive and farm business skills earned Dave the honor of 2008 Top Producer of the Year.
Leadership transition. In 1999, Dave started to transition the management responsibilities to
Angie. With an MBA in international business and a background in commercial banking, Angie returned to the farm poised to take the operation to a new level.
"One day, when Angie was in high school, I said to her, ‘You need to understand enough about the farm to either manage it, rent it or sell it.’ She has worked her way to becoming a manager," Dave says.
Angie says their succession plan has evolved throughout the years. The operation consists of 6,000 acres of row crops, most of which are rented. The main operating entity is an S corporation, and the family owns land in a C corporation.
"For the last 10 years, my husband and I have bought ground on our own. Through gifting and other means, we’re trying to get more involved with the other corporations," Angie says.
At the beginning of 2012, Angie’s husband, Steve, left his off-farm job to join the farming operation full-time. "We take Angie’s information, Steve’s eagerness and my background and experience and we talk things out," Dave says.
Off-farm siblings. In addition to Angie, Dave and Marilyn have two sons: Mark, an engineer, and Robb, an attorney.
Before Angie and Steve became heavily involved in the operation, Dave and Marilyn knew they needed a plan to treat their children equally. They put a value to their assets and came up with
options that would fit both their on-farm daughter and off-farm sons.
"The options were I would owe my brothers for the rest of my life, trying to buy out their shares, or we’d come up with some other way to compensate them and provide a fair share of the farm," Angie says.
The fair share came by way of insurance. With the assistance of an attorney, a family irrevocable trust was established to hold permanent life insurance on Angie’s parents. The payout of the coverage will go to Angie’s brothers in place of a portion of the farm’s assets.
Because it is Dave and Marilyn’s wish, this succession plan is accepted and appreciated by their children. "I’m grateful to my parents that they were willing to get serious about this process, put numbers down and develop a plan that made sense for all of us," Angie says.
Watching her parents develop a succession plan was a valuable lesson for Angie. She was involved in the process, but, at her parents’ request, more as a listener, which allowed Dave and Marilyn to fully identify what they want for the future of the farm.
Now, Angie and Steve are working to prepare the next generation, which includes their son and daughter. "We’re trying to give our kids the skill sets so if they are interested, they can come back to the farm," she says.
Take Charge of Your Farm's Destiny
"There’s no such thing as ‘no estate plan,’" says Cari Rincker, principal attorney with Rincker Law in New York, N.Y. Every state has laws in place to divide a person’s assets, even if no last will and testament is in place.
"The real question is how a farm family can improve the default estate plan determined by the state," she says.
Rincker says drafting a will is an important part of the estate planning process, but a good estate plan requires much more. "Estate planning is a lot about goals and how to accomplish those goals with the assets and liabilities in place," she adds.
With her clients, Rincker discusses their business plan, succession desires and retirement plans. "Every farm family is different; therefore, every farm family has different needs and objectives," she explains.
When those goals are detailed, Rincker has the farm families create a list of assets. "Not only is this information-gathering paramount for the estate planning process, but I also find it to be a healthy exercise, forcing my client to get a snapshot of his or her full financial picture."
Once an estate plan is in place, she says, families should revisit it every three to five years or when there is a major life event.