The Rural Voice, 1990-05, Page 32GICRATES FOR 45
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Would you
like to discuss
Estate Planning?
PROFESSIONAL INSURANCE
REPRESENTATIVES
WATKINS, DAUGHERTY
& ASSOCIATES
LICENSED INTERMEDIARIES
FOR
sus
IMPERIAL UFE
Estate Planning, Business
Insurance, Group Benefits,
RRSPs, RRIFs, Annuities,
Disability Insurance,
Retirement Planning,
Equity Funds
The Imperial Life Assurance Company
of Canada
305 King Street West, Suite 609
Kitchener, Ontario N2G 1 B9
LUCKNOW:
LISTOWEL:
KITCHENER:
528-3514
291-5040
744-5281
28 THE RURAL VOICE
ElE MOVES
Financial Strategies for Farmers
Bob Watkins
"Wise Moves" is a series of articles provided by
Watkins, Daugherty & Associates. Taking as a
case study the farm of "Martin Wise," financial
experts Richard Daugherty and Bob Watkins
outline various ways that farmers can enhance
their financial planning and security.
Your questions and comments are wel-
come: telephone Bob in Lucknow 528-3514,
Richard in Listowel 291-5040, or Kitchener
(Imperial Life regional office)744-5281.0
ESTATE PLANNING
Thinking about our family farm
and our children, Bradley and Cynthia,
Mary and I became concerned. We
have life insurance, so we know they
would both be taken care of if we died
too soon. But our concern is whether
we will be able to treat them equally
later in our lives.
Our insurance representative
suggested that we do some planning
to prevent serious family problems in
the future.
In our case, Cynthia shows no
interest in the farm. On the other
hand, Bradley helps out with most of
the operation and wants to be a farm-
er. I would like to encourage him to
work with me and take over the farm,
but that is where our problems start.
I have spent my whole working
life building the farm operation, so
most of my assets are tied up in it.
Because I want to treat my children
equally, I can't simply give the farm
to Bradley when Mary and I retire. I
would have nothing of equal value to
give Cynthia. And Bradley's business
would be in jeopardy if I tried to pull
assets out of the farm at a later date.
That raises the next problem:
how to provide retirement income.
By the time Bradley takes over the
farm, Mary and I will have to be self-
sufficient. The farm operation will not
support Bradley and his family as well
as Mary and me.
I asked our insurance representa-
tive how someone could go about
Richard Daugherty
planning for these factors. He told us
about "estate planning."
We set up an appointment to have
an estate analysis completed, and a
couple of weeks later got a report
which included a detailed outline of
our present situation. This report was
done free of charge by a department
of our representative's company.
It showed us how to arrange our
affairs so Bradley and Cynthia will be
treated equitably when we die. It
made recommendations for dealing
with future problems that we had not
considered concerning capital gains
taxes and the distribution of our assets.
The report also gave us some good
ideas about how to use our assets to
best advantage to help provide our-
selves with retirement income.
Mary and I then consulted our
accountant, who checked the tax
recommendations of the plan and
supported the ideas in it. We are now
having our wills rewritten by our
lawyer so the plan will work legally.
By the way, did you know that
a family farm can be passed from
generation to generation without
triggering capital gains tax? However,
if the farm is eventually sold, all the
taxes that have been postponed over
the generations will have to be paid by
the descendant who sells it. For this
reason, it may be wise to use your
$500,000 capital gains exemption
when transferring your farm to your
children.°