TYLER?- More than 40 farmers came to the Tyler Golf Club on Wednesday to learn more than many probably ever wanted to know about planning for retirement, disability and death.
The seminar "Preserving the Family Farm" was offered by representatives of the Pluto Legal firm and Jorgenson Financial Services, both based in Tyler.
"I came to learn some of this stuff," said Blaine Maranell, who farms near Tyler. "I've got six children, that's the biggest problem, it's way too complex. One son and one daughter will probably farm, two are teachers, one lives in France. With the price of farmland going up, it doesn't take much to cost you a million."
Lisa Pluto, owner of Pluto Legal, and Leah Gilbert, associate attorney, held a joint seminar on planning to pass farms down in the family.
The details are many and complicated, but if there was a single distilled essence it's that no one size fits all. Each plan has to be tailored to the farm- owners' individual circumstances and must be regularly updated as those circumstances change.
"You can't just walk into an attorney's office and say, 'I want X,Y, Z,'" Gilbert said. "There should be education on both sides. You tell them, 'This is who I am' and create a plan together."
Inheritance is often complex, but a farm adds another layer of complexity.
If the owners have several children, some may farm and some may not. Experience shows non-farming children see the world differently, Pluto said.
Farming children may want to buy out non-farming heirs, and farmers have to plan how farming children can do that without bankrupting themselves. Farmers may wish to develop a formula that locks in land rents so non-farming children cannot impose unreasonable expectations.
"You want to set options and have such clarity there's no room for conflict," Pluto said.
And then there are the taxes.
"There are very few things we can do in this world without a tax consequence," Gilbert said.
There are estate taxes, inheritance taxes and in Minnesota, gift taxes to consider. Pluto and Gilbert explored a number of options to keep taxes as low as legally possible.
And before inheritance there is the chance of disability and possible need for long-term care. At current life expectancies in this country, an estimated 70 percent of people over 65 will need long-term care.
Nursing home care can easily cost $4,000-$8,000 per month. At current land prices, that's equivalent to one acre per month.
"One of the biggest fears is long-term care issues," said Marjean Ossefoort, financial adviser with Jorgenson Financial, who led the financial planning and asset protection seminar. "If you don't have that piece of the puzzle taken care of, it can blow up your whole plan."
There are insurance policies to cover long-term care but with many of them, the heirs get nothing back if the policy holder dies suddenly.
Ossefoort outlined alternatives to "use it or lose it" policies.
And what they stressed again and again was that no plan can stand still. A plan should be updated every time there is a significant change in health, the family situation, or government.
"It really tells you you've got to figure out some planning," said Dave Boulton, who farms near Porter. "I'm in my 50s, and I don't have a plan. There's so many variables and ins and outs."