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Plan for the future now with a wealth transfer plan
Buckeye Farm News
In the mid 1980s when he was still chairman of Nationwide Insurance, Frank Sollars started working on an estate plan to pass on the farm to his five children. He wanted to make sure his family was taken care of and the process made as simple as possible.
“It wasn’t something that you discussed with your neighbor but it was something that had to be done,” recalls Sollars’ son, Jeff.
Frank Sollars, who was on Nationwide’s board from 1968 to 1989 and an Ohio Farm Bureau president, took over the Washington Court House farm started by his grandfather. He died in 2007, and his widow and children continue to work today on their estate plan with Nationwide agents.
“When one parent passes on and transfers everything to their spouse, there aren’t tax consequences,” Jeff Sollars said. “Most estate problems happen after the second parent passes on because there’s only so much that you can transfer tax free.”
Nationwide agent Bob Pittser said that without proper estate planning that a family could lose its farm.
“People have lost farms because they didn’t have the money to pay taxes,” said Pittser who was a Farm Bureau organization director from 1979 to 1984 before becoming a Nationwide agent. He has known the Sollars for 30 years and is now their Nationwide agent. Nationwide provides insurance for the family’s farm and trucks as well as for personal vehicles and homes. The family also has 529 plans and life insurance through Nationwide.
Pittser said some farmers make the mistake of not having an estate plan in place because they mistakenly think they aren’t worth much. They don’t realize that the land they have farmed for decades can be worth a lot of money.
“Farmers are great about growing and harvesting crops and don’t like to do this stuff,” he said. “They don’t think of themselves as being wealthy because they live conservatively. Sometimes they need someone to push them and make them realize that their land could probably sell for $3,000 to $4,000 an acre and that they need a wealth transfer plan.”
Jeff Sollars, who helps run the family’s 3,700-acre farm with two of his brothers, said keeping a wealth transfer plan up-to-date is critical because estate laws are “very complex and constantly changing.”
Nationwide and Ohio Farm Bureau are teaming up this year to help educate OFBF members about the importance of having an estate plan, said Don Russell, who is territory sales director for Nationwide Financial Network. Russell talked earlier this summer with Farm Bureau organization directors during a meeting.
“Having wealth transfer planning meetings with county Farm Bureaus is something we used to do years ago. We decided it is something we should do again,” Russell said.
“We want to talk about wealth transfer, elder law planning, which is Medicaid and long-term planning, passing the family farm onto the kids and what to do when you have one kid who works on the farm and one who works in town.”
Pittser said he is working with a farmer who has three children but only one works on the farm. The two daughters who don’t work on the farm will receive the payout from life insurance on both the parents, Pittser said.
“The life insurance doesn’t pay until both the parents are gone. This gives the girls the benefit of those policies and the son gets to keep the farm. There will probably still be the problem of taxes but at least everybody is getting something,” he said.
“The biggest problem is when you duck it and don’t have a plan. The worst thing you can do is not have a plan because everybody passes away.”