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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. Specializing in: • Woodlot Management • Reforestation Projects • Plantation Tending (Manual or Mechanical) • All Forestry, Wildlife or Wetlands Projects * Competitive Rates * Manage your woodlot with a long-range plan WARREN D. 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