HomeMy WebLinkAboutThe Citizen, 1997-03-19, Page 23THE CITIZEN, WEDNESDAY, MARCH 19, 1997. PAGE A-3.
Agriculture '97
Keeping wills up-to-date essential
Continued from A-2
assets frozen until a court decides
on division of the properly. There
will be a lot more legal expenses,
and it will be at least a year before
the assets can be divided. "It's
much cheaper to have a lawyer
draw up a will than to do the legal
work if you die without a will."
She explained the extra expenses.
It might be necessary to hire
appraisers to value the assets. Chil
dren under the age of majority will
have to be represented by a lawyer.
If you do have a will, you should
review it regularly. Some things,
like getting married after you sign
your will, make it invalid.
The Family Law Act has had an
impact on farms. It declares that a
marriage is a true economic part
nership and applies to separation,
divorce or death. In the case of a
death of a spouse, the surviving
spouse has six months to decide on
one of two options: (a) what is pro
vided under the will or, (b), what is
provided for under the Family Law
Act.
When a marriage ends, both
spouses get an equal share of all
property acquired during the mar
riage, including land and quotas.
Exempted from this is the value of
the farm when the marriage took
place and any gifts or inheritances
during the marriage if they can be
traced.
There are other legal documents
you may want to consider, Krantz-
Sippel said. One is a living will,
which allows you to give specific
instructions on your care at a time
when you are no longer capable of
making decisions for yourself. This
is a form of power of attorney for
personal care.
There is also a power of attorney
for property. You can name one or
two people who have the power of
attorney to look after your property
when you are incapacitated.
If two or more people are work
ing together, she said, they should
have a working agreement. "Most
people don't put it in writing to set
out rights and obligations until they
set up a corporation," she said. A
partnership agreement sets out how
people can get out of the arrange
ment, and can set up the financing
for the partners getting out.
The cost of probating an estate is
$5 per $1,000 of the estate, up to
$50,000 and $15 for more than
$50,000 but these can be reduced
because excluded are assets jointly
owned and assets going to a named
beneficiary. Also not included is
property outside Ontario.
Executors' fees can be reduced if
you name a family member or
friend who will do it for less
expense than a professional.
Financing for needed cash
Ron Bolton of CIBC spoke on
financing and funding options for
needed cash at the time of a farm
transfer. He explained how banks
determine the debt-carrying capaci
ty of a farm. Banks decide on loans
based on the three "c's", he said:
collateral — what you have to back
up the loans; capacity — what the
business can support; and character
— your commitment to meet your
obligations.
He urged people needing to bor
row to take advantage of long-term
fixed rates now that rales are so
low. "The opportunity to lock in
borrowing has never been as good
in 50 years."
Looking to the future, he said
farms would have to be larger. He
foresees dairy farms with 500 cows
and more, farrowing operations
with 2,500 sows and more and fin
ishing operations selling at least
5,000 pigs. But there is a new gen
eration of farmers willing to accept
technology and Ontario farmers
have some natural advantages.
Major east coast U.S. markets, for
instance, arc eight hours closer by
truck for pork producers from
Ontario than from Iowa.
David Packham of MetLife told
the meeting that there are four pro
fessionals who need to be part of
the planning of th^ estate for busi
ness owners: a lawyer, an accoun
tant, a banker and an estate planner.
"You need a team approach involv
ing all of them."
Estate insurance can help meet
the cash needs of settling an estate,
he said. The family member
remaining on the farm may not be
able to afford to sell off part of the
farm to pay estate costs and provide
a fair settlement for non-farm sib
lings. Estate insurance, paid out
over the previous years, can be a
solution.
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