Senior Partners - 4
Elizabeth Williams DTN Special Correspondent
Mon Dec 22, 2014 10:35 AM CST
(Page 1 of 3)

YANKTON, S.D. (DTN) -- Farmers can spend years attending estate planning seminars and reading magazine articles about succession planning. Then decisions often devolve into all talk and no action.

Alan Hojer works as a legacy consultant with Keep Farmers Farming, a division of First Dakota National Bank in Yankton, S.D. The bank was frustrated that too many farmers failed to complete estate plans. (DTN photo by Elizabeth Williams)

What frustrated Nate Franzen, president of the agri-business division at First Dakota National Bank in Yankton, S.D., is that so few farmers moved to the implementation stage. His bank's agriculture advisory board suggested farmers needed a service to help them walk through each step of the process. They started a program in May.

"My dad and I talked about it for years," said Steve Eichacker, a Salem, S.D., farmer who is in the Keep Farmers Farming program at First Dakota National Bank. "We knew we needed to do something about our estate plan. We'd say we'll visit about it 'next week' but that never happened."

Steve and his wife, Cathy, are now midway through the estate planning process which they started in September. What makes the First Dakota National program unique is it walks families through the process step-by-step.

"They do all the leg work, making sure ownership titles are transferred and they take the paperwork to the county register of deeds," explained Eichacker. "When you sign up with these guys, you know it's going to happen."

Alan Hojer, First Dakota National Bank's legacy consultant, agreed. "Our goal is to help them find peace of mind. It's really that simple," he said.

A handful of agricultural succession and estate planning consultants nationwide walk farmers through the entire process start-to-finish, but they are rare. Besides affiliations with some banks and Farm Credit institutions, providers include psychologists and family business advisers. Fees can vary widely among consultants. But cost should not be the main determining factor. How complicated and large your operation is and family dynamics all play into the consultant's bill.

Johnne Syverson, a fee-only succession and estate planning consultant with Transition Point Business Advisors in West Des Moines, Iowa, said you want to find a consultant who will act as the "quarterback" of a complete collaborative team which includes the farmer's current advisers (such as lawyer and CPA). This quarterback then manages the team to orchestrate the process, not push a product.

"If a so-called 'consultant' has a 'package' to sell you, whether it's a certain type of trust or life insurance policy, that's not the consultant you need," warned Syverson. "Certain less-than-qualified life insurance agents are jumping on the need out there offering 'planning' services at no charge and do not have the expertise that is needed. They end up selling the farmer a large policy and leave the rest of the planning undone," said Syverson. "If all you have is a hammer, everything looks like a nail!"

Syverson's company first interviews everyone in the family, including spouses and key personnel. He then surveys the personality traits of all the key stakeholders in the farm business, while also analyzing the farm's financial and legal documents for complete understanding. He then works with all the farmer's professional advisers to discuss options that can work for that farmer's individual situation.

"The process can take a year," noted Kevin Mills, an estate planning/family business consultant with Kennedy and Coe in Kansas City. "The important thing is keeping the farm together for most families," added Mills. That takes time, expertise and implementation.

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