Tools You Can Use

Written by Michael Baron on . Posted in General Estate Planning

Dear Michael:

We read with some interest about your new web site you were starting to help farmers and ranchers. At the time, you were having some difficulty with the site and you said you’d let us know when it was ready. We use the computer somewhat but it’s kind of limited to email and games. Our son, who farms with us, uses his computer quite a bit, so maybe he can help us. When will you be ready? – Waiting

Dear Waiting: The site is finally up and running – hopefully without too many snafus popping up. Our web designer says it takes about a month for all the bugs to work themselves out and the only way to find them is for people to use the site and let us know what works and what doesn’t.

On our web site, we have a variety of items for everyone. You don’t have to be a computer geek to use the web site. I designed so it can’t be that complicated.

We have our ‘Farm and Ranch Magazine’ column posted every two weeks. If you travel or like to receive your reading material even when you’re on the go, you can sign up to receive these columns on your computer, tablet or even your cell phone. You’ll be able to read along – even when you’ve got the ‘auto-steer’ set.

We have information posted on income tax rates for the coming 2014 year, although not being a CPA, all I do is post the rates off of the IRS web site. This section gives people an idea where they want to be or need to be when they are selling commodities and what probable tax bracket they would be in.

As time goes on, we’ll be posting ideas written by guest CPA’s about how to handle farm income and/or other income as your life progresses with tips and tricks on how to lower your income tax rates without going into debt.

There is an estate tax calculator on the web site. You put in the approximate values of your entire estate and determine if you have an estate tax problem or not. If you want to be certain you don’t have an estate tax problem, use ‘recent land sales’ in your area as a value for your own farmland – because that’s what IRS is going to be using. You may never sell it for that amount nor expect your children to pay that amount but, put quite simply, IRS only cares about what you ‘could’ sell it for.

We also have the Equitable Distribution of Assets to Farming and Non-Farming Children finally up and running.

This section allows you to put in your basic asset information regarding your current status by helping you list your assets in two categories – farming and non-farming.

This is something I do routinely with my clients to show them what they have in farm assets versus what they have in non-farm assets such as savings, unsold commodities life insurance proceeds, retirement plans, etc. This is key to helping you set up your farming child for success. This will show how much you have to give to the non-farming children in non-farm assets to offset what the farming child needs in farm assets to succeed.

This continues into a section to help you determine what value your farming child has provided to you, to the family farm operation as a whole, and what percentage of the total value of your family farm your farming child has earned in ‘sweat equity’ over the years. It’s pretty easy to use and gives you real numbers you can use to quantify there contribution to the family farm.

The last section then boils all the numbers down for you – what happens if you give the farm to all the children, what happens if you give the entire farm to one child and non-farm assets to the non-farming children and what happens if you give the ‘sweat equity’ portion to the child who stuck it out with you.

There’s even farm rent and mortgage calculators to give you real numbers as to what your farming child will face someday. Now you can break down all the ‘don’t know’s’ into real life numbers to help you in planning your estate.

I’ll be demonstrating how to use this web site at the KMOT Ag Expo and the KFYR Agri-International each day with a one-hour seminar to teach even the most computer challenged person how to make sense of the numbers. Look for me there and plan on attending at 2:00 PM each day.

“Keeping the Family Farm in the Family”
Great Plains Diversified Services, Inc.
1424 W. Century Ave., Suite 208
Bismarck, ND 58503-0917
Telephone: 701-255-4079
Fax: 701-255-6106
Toll Free: 1-800-373-4078

Michael Baron is not an attorney. Information given through written, verbal, or electronic means by Michael Baron or Great Plains Diversified Services, Inc. is not to be construed as legal advice. An attorney, tax advisor, or other registered advisor is needed for the completion of the estate planning process. An attorney must be consulted for legal advice and the drafting of legal documents.