Vanilla is an important spice – How is it grown?
Like any good lawyer, the first answer is always, “It Depends.” However, before jumping into a Trust there are a lot of other options to consider.
First – let’s set some parameters for this discussion: if the value of all of your assets is more than the estate tax exemption (for 2023, that is $12.92M or $25.84M for a married couple), then effective planning can be much more complicated and beyond the scope of this article. For purposes of this article, we are assuming that your combined net worth is less than the exemption amount, so we can make use of several techniques that are relatively easy to implement.
Let’s (briefly) talk about the two primary kinds of trusts – Revocable and Irrevocable.
Like the name suggests, a Revocable Trust can be revoked or changed at the whim of the Settlor (the person who creates the trust – in this case, YOU). It is not “irrevocable” until your death. This is useful for easy transition to the next generation and avoids the somewhat time-consuming and cumbersome journey through Probate. It is fairly easy to set up, with the most complicated feature being remembering to put all (or almost all) of your assets into the Revocable Trust as you continue on your life journey.
If a Revocable Trust is a good idea for your planning, I don’t recommend putting your farm assets in the TRUST. Instead, I recommend creating a Limited Liability Company or other entity to hold the farm assets, and then your Revocable Trust can own the entity. The entity is free to continue farming as before, the “public-facing” entity is not a “trust” (more business-like appearance), and it is much easier to divide ownership shares between heirs than acres (or tractors).
A Revocable Trust does not save estate taxes, which is why you should seek other planning if you have a net worth in the Estate Tax Danger Zone (ETDZ).
An Irrevocable Trust cannot be revoked and has only limited ability to change. It is a completed “gift” of your assets to the Trust. Those assets must be appraised and a gift tax return filed, which will erode (reduce) your available estate tax exemption. Because I try to build as much flexibility as possible into my clients’ estate plans, this is not (typically) a good tool for folks not in the ETDZ.
There are other planning tools that might be easier to transfer assets to the next generation if your assets are not an active farm business. For example, if you cash rent all of your land (or farm on the shares), or for other assets like investment accounts, a “Transfer on Death” (TOD) ownership will retain 100% of ownership in your hands and control, but at your death, the asset automatically transfers to the named beneficiary. This technique works for any asset that does not already have a beneficiary designation (such as an IRA). TOD ownership can be used for real estate, investment accounts, automobiles, and anything with a “title” or “named” ownership. You can even use it for “non-titled” personal property, like artwork, furniture, and household goods, if you set it up correctly.
When you talk to your attorney, be sure that your advisor reviews the available options with you. If you go to an attorney and say “I want a Trust,” the attorney should spend some time reviewing other available options with you. If not, then please talk to another attorney. I have seen too many clients who have trusts that are not useful to the client’s estate planning goals – and some with harmful (with a tax burden or impact on family harmony) and unintended consequences. Be sure you understand the options and are comfortable that a Trust is right for you.
Single-use plastic is one of the biggest contributors to landfills and trash pollution. [National Geographic: Great Pacific Garbage Patch]. We’ve all heard of “microplastics” by now [NOAA: What are Microplastics?], and plastics can be found in measurable amounts in US waterways and water-sourced foods [USGS: Microplastics in Our Nation’s Waterways].
I could go on with the citations, but you get the idea, and this is probably not news to you.
What can you do about it? Start making a habit of avoiding plastic.
Avoid: Plastic bags for purchases, plastic containers for take out (or “doggy bags”), overly-packaged items (always encased in plastic).
Biggest thing to avoid? Plastic drink containers, especially water bottles. [Earth 911: Who are the Biggest Plastic Polluters 2021].
While corporations (see above image) are by far the largest polluters, individuals can help to move the needle toward conservation and reduction of pollution by taking consistent action to avoid contributing to the problem, and encouraging others to join in.
TrashBlitz Austin used volunteers to collect and count trash to come up with a way to reduce the use of plastic in the city of Austin. 70% of the trash picked up consisted of single-use plastic items. One of the outcomes of this effort was the Austin Reuse Coalition with a focus on helping restaurants reduce the use of plastic.
Please do your part to reduce use of plastic, and encourage others to do so, also. If everyone eliminated plastic bottles and plastic bags from their lives, there would be an immediate and visible reduction in pollution. It has to start somewhere – let it start with us.
WARNING – POLITICAL CONTENT AHEAD. Read at your own risk.
I subscribe to Medium to hear from a wide variety of “layperson” voices. There is the occasional thoughtful and insightful writer, and today’s selection is from Chris Newman. This author has several thoughtful articles from an ag perspective and is worth the read.
The most recent installment is In the Wake of Roe: What Farming Can Teach Us About Political Action
The author compares the day-to-day commitment of farming with the tourist mentality of WWOOFing (World Wide Opportunities on Organic Farms).
On the political left, you have people who are “flash in the pan,” who show up to the protests, who blow up social media, and who talk at length about what’s wrong with the right – but they cannot get a cohesive, consistent, and enduring message to stick long enough to effect change. These are the WWOOFers: They have a good message and good hearts, but they can’t seem to maintain any kind of effective organizational structure after the protest. The author suggests that they get no help from the leadership, because the leadership of the left is more concerned with maintaining power than in coordinating forces to effect change.
On the political right, you have people who are committed to the long haul of their conservative cause, and use long-term strategies and deep and consistent involvement to gradually move the needle in their direction. These are the “farmers” of the political world.
We’ve seen this for years – the Obama “Birthers” that Would. Not. Give. Up. on their message – even after President Obama was no longer in office. Now we have the “Election Denier Influencers” who are gaining traction at the grassroots level and bullying local officials into listening to their message. (See: Republicans Push to Recruit Election Deniers as Poll Workers Causes Alarm, from Guardian, and the NPR Podcast for June 30, 2022: Election Denier Influencers). These folks don’t give up, don’t quit, and are intent on moving the needle, even more. They are taking action that produces results. They are not protesting in the streets (well, except for that one time), they are voting in every election, they are recruiting people to run for office, they are attending local government meetings and they Don’t. Give. Up.
The left is appalled, mortified, and probably a little scared at the slow, but steady, forward momentum of the faction of Election Deniers. They should be appalled, mortified, and a lot scared. There is a reason that Trump got into office, and there is a reason that the Election Deniers are gaining momentum, and might have more to do with the method than the message.
Interesting article by Farm Journal (graphic from FJ, also). A very interesting source article from the University of the Potomac which shows which countries are the top producer of which commodity.
Fun fact – Cow’s Milk is the top agricultural commodity in 37 countries, including the US. The top 5 worldwide commodities are Cow’s Milk, Sugar Cane, corn, wheat, and rice.
Links to articles:
AgWeb – Who Produces What?
University of the Potomac – Where Does Our Food Come From?