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August 2010 Archive for 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.

Life Insurance Analysis

Aug 31, 2010

 From Legacy Moment eNewsletter (08/27/2010)
Please join us for future issues, delivered via email each Friday.


iStock WheatThough the purpose of most succession plans may be transferring ownership of the operation during the owner’s lifetime, many owners, for various reasons, maintain some level of ownership until death. If this is the case in your family, planning to transfer an ownership interest held at death means the transfer must also achieve other goals, including minimizing the estate tax, providing financial security for a surviving spouse and transferring the balance of ownership to the intended successors.

A thorough financial plan for each family unit that is dependent on the operation will ensure that the plan satisfies all financial obligations and provides an adequate inflation-adjusted income. Your plan may include life insurance; if so, use the Life Insurance Needs Analysis tool from our Legacy Project Tool section.


News & Resources for You
FAQ’s about succession planning help guide you in the right direction.

Catch up on archived episodes of "Leave a Legacy TV."

Follow our case study families as, together, we address their succession planning objectives.
  
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Don't Let 'Em Fool Ya!

Aug 24, 2010

 From Legacy Moment eNewsletter (08/20/2010)
Please join us for future issues, delivered via email each Friday.


Too many professional practitioners equate estate planning for family agribusiness owners with succession planning. Although there is a degree of overlap between the two practice areas, their goals are wholly and completely different.

Succession planning is designed to provide a plan for the orderly transition of ownership from one generation to the next at the owner’s retirement, disability or premature death.

 

  • Succession planning focuses on transferring ownership to family members, co-owners, key employees and/or third parties as a going concern under specified conditions.
  • Estate planning addresses transferring wealth to heirs, providing for survivors and minimizing the estate tax after death.
News & Resources for You
Join us as we spend a day with an extraordinary agricultural leader.

Keep up on breaking news about the Legacy Project.

Legacy Project Workshops: Make plans now to attend one of the December Legacy Project Workshops in Indianapolis (12/07), Columbus (12/08), or Lansing (12/10).  Find out more details.
 
Have you checked out the new and more robust AgWeb and Legacy Project Web sites? They offer easier navigation and more reasons to check back every day. 
 
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The Estate Tax... Again?!?

Aug 17, 2010

 

From Legacy Moment eNewsletter (08/13/2010)
Please join us for future issues, delivered via email each Friday.

 


The estate tax is again looming on the horizon, so it’s important to recognize how an estate plan---to mitigate the estate tax---should dovetail into a comprehensive succession plan.

As the law is written, an estate in excess of $1 million will be subject to a 55% estate tax starting in 2011. Though Congress could still act to change the law, it’s doubtful they will---especially given the dire need for tax dollars.

Keep in mind the following points as you consider how to integrate an estate component in your succession plan.
  • Common, off-the-shelf, estate planning strategies will not mitigate the estate tax and maintain an operation’s integrity for the family business owner.
  • Focus first on your goals for succession, and then craft your estate plan to complement your succession solution.
  • Plan for your ownership transition and the family’s financial security first; then consider the estate tax.
  • There is no "silver bullet" to mitigate the estate tax; an effective plan will require a combination of tested tools and techniques.
iStock Two Kids in FieldNews & Resources for You
Take advantage of these Estate Planning Tools, courtesy of the Farm Journal Legacy Project.

A Wedge of Discontent: One family’s story may serve as a wake-up call for others.

Legacy Project Workshops: Make plans to attend one of next week's Legacy Project Workshops. The next two locations are Columbia, Mo., and Wichita, Kan. Find out more details.

Have you checked out the new and more robust AgWeb and
Legacy Project Web sites? They offer easier navigation and more reasons to check back every day. 
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One Simple Way to Transfer Ownership: Share Redemption

Aug 16, 2010
 
From Legacy Moment eNewsletter 06-04-2010
Please join us for future issues, delivered via email each Friday.

 
iStock Corn Field CroppedBloomington Harvesters, Inc., is a family corporation that custom harvests grain up and down the Midwest. They start in the South early in the summer and end up in Canada in late September. John is a co-owner and head of the family. John’s son Drew is just starting his third season managing a crew. He’s gradually assumed more responsibility and acted with an owner’s resolve to address challenges. John wants to transfer a controlling ownership interest in the operation to Drew.
 
John owns 70% of Bloomington Harvesters and Drew owns the remaining 30%. Though he’s worked there a while, Drew does not have the capital to purchase the 21% necessary to gain a controlling interest. John may consider allowing the corporation to redeem his shares.

Redeeming John’s shares will effectively transfer ownership control to Drew, even though none of the stock is transferred directly to him. A redemption reduces the number of shares outstanding and increases the respective value of each outstanding share.

News & Resources for You

Leading the Change – Legacy Project Workshops
The next series of Legacy Project workshops are scheduled for Columbia, MO on Wednesday, August 25thand Wichita, KS on Friday, August 27th.  Sign up online or call the Farm Journal Events Hotline for more information: (800) 909-3681. 

Legacy Project 2010 Report: The full issue is now available for free download.

More questions? You can always Ask Kevin  

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