Estate Planning: Transitioning for the Future of Horticultural Businesses in New Jersey

In 2012, 137 farmers who had participated in a statewide business management program were surveyed, and 69% indicated an interest in learning more about estate planning.  Almost three-quarters indicated that they anticipated passing their farms down to their children, thus transitioning the agribusiness to the next generation. Despite the reluctance of many to plan for a future without them, the need for proper estate planning and assistance is currently of vital importantance in the agribusiness sector. According to the 2012 U.S. Census of Agriculture, the average age of principal farm operators in the United States and New Jersey is 58.3 and 59.5, respectively.  While farmers, on average, have a median net worth 7.5 times greater than U.S. households, much of this wealth is illiquid (e.g., land, buildings, and equipment).  To address the need for business continuance and estate planning, the Preparing for Later Life Farming program was developed to assist multi-generational New Jersey farm families in preparing for farm transition.  This eight-hour, one-day program was offered in three New Jersey locations from February 9–11, 2015, and was attended by over 70 producers. The programs included presentations about farm transfer methods, calculating retirement savings, sources of retirement income, rules for tax-deferred savings withdrawals, methods of increasing farm income to support multiple generations, how to find legal and financial experts, and strategies for communicating with family members about farm transfer issues.  We surveyed 52 participants using a post-then-pre- evaluation design where participants were asked to rank each question on a scale of 1–5, with 1 being poor and 5 being excellent.  For each question, respondents were surveyed after the class and asked to rate their knowledge on the subjects both before and after the class. Respondents found that their knowledge and confidence increased by a full point or more on: how well prepared they are to discuss farm estate planning and farm transition with family members and business partners; their ability to estimate future business financial needs for themselves, family members and business partners;  their knowledge of the potential pitfalls of farm transfer and estate planning; and their understanding of how to choose an appropriate expert to assist with preparing their estate plan. Self-rankings increased slightly less than one point on their ability to estimate future personal financial needs for themselves, family members and business partners and their ability to identify potential income for the future of the business and family.