The Rural Voice, 1997-01, Page 32G. A. WILLIAM CUTBUSH
CHARTERED ACCOUNTANT
Serving Owen Sound and
area over 20 years
TAX RETURN PREPARATION
Personal, Corporate and Farm taxes
BOOKKEEPING SERVICES
SYSTEMS DESIGN, MANUAL &
COMPUTER
1195 -2nd Avenue East,
Owen Sound, ON, N4K 5P7,
(519)371-5418
Fax 371-8179, Home (519) 797-2886
LESLIE
HAWKEN & SON
LIVESTOCK & FARM EQUIPMENT
• Self standing yard dividers • Sell locking feed mangers
• Custom Manufacturing
Round Bale Feeder
R.R. #3 Markdale 519-986-2597
Bred Beef and Dairy Cow
Program with Professional
Financial Assistance
Payback over a 6 year period.
This program is backed by an
all peril insurance program
including calving, bloat,
transit to and from your farm
plus much more, such as
vaccination and veterinarian
assistance.
Wanting to start a cow/calf
herd or add to your existing
herd.
Contact Glen Reay of
Reay's Unlimited
at 519-369-5153
28 THE RURAL VOICE
hurts the situation, not just because
of the loss of the farm but because
$15,000 is lost to real estate fees. In
all, the estate expenses range from
$32,500 for the case where he has a
will and joint ownership, to $72,655
for the farmer in the worst scenario.
The ability to carry on farming
can also be jeopardized by the need
to meet the cash needs of family
members. In the case of farmer Bill
dying without a will, and without his
wife Mary having joint ownership of
the home farm, it will require each of
the children to receive $70,836 in
settlement. Under joint ownership
with Mary, the requirement for the
children is $4,125 each. If he has a
will leaving everything to her, there
is no need to come up with cash for
the kids.
The difference is substantial. In
Case 1, it will require a minimum of
$128,491 and a maximum of
$270,164 to settle the estate with
cash available only $162,000. With
Case 3, it requires only $32,500 to
settle the estate, allowing the farming
operation to carry on largely
unaffected financially.0
Case Study 3
The farmer has his affairs in order, with a w'll, insurance and joint ownership.
Assets
Before
Death
Bill's
Estate
Mary's
Estate
Post
Settlement
Savings and Investments -joint
15,000
0
15,000
0
RRSP - Beneficiary Named
22,000
0
22,000
12,500
Livestock
85,000
85,000
85,000
Machinery
65,000
65,000
65,000
Farm 1 (Home farm) -joint
350,000
0
350,000
350,000
Farm 2
250,000
250,000
250,000
Total
$ 787,000
$ 400,000
$387,000
$ 762,500
Liabilities
Accounts Payable
6,000
6,000
6,000
Operating Loan
35,000
35,000
35,000
Mortgage on Farm #1
80,000
0
80,000
80,000
Mortgage on Farm #2
110,000
110,000
0
110,000
Total
$ 231,000
$ 151,000
S 80,000
$ 231,000
Equity
$ 556,000
$ 249,000
$307,000
$ 531,500
Estate Settlement Calculations Estate
Cash Costs Related to Estate Settlement
Probate Fees 5,500
Estate Administration Charges 20,000
Funeral Expenses 7,000
Real Estate Fees on sale of Farm #2 0
Total Expenses $ 32,500
Net Value of Estate $ 216,500
Division of Net Value
Mary $ 216,500
1/4 of the remaining $ 0
Total $ 216,500
Children
Remaining to be divided $ 0
Bill Jr $ 0
Sam $ 0
Becky $ 0
Analysis
Total Cash Needed Minimum $ 32,500
Maximum $ 32,500
Proceeds of the farm sale 0
minus real estate fees 0
minus mortgage 0
cash available from sale 0
add savings and RRSP 37,000
Total Cash Available $ 37,000
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