August Clinic Dates- Financial & Estate Planning, Beginning Farmer Programs, Debtor/Creditor Law, Water Rights and Much More…

Farmers and ranchers are invited to attend a FREE clinic.  The clinics are one-on-one, not group sessions, and are confidential.  The Farm Finance clinic gives you a chance to meet with an experienced Ag law attorney and Ag financial counselor.  These clinic staff specialize in legal and financial issues related to farming and ranching, including financial planning, estate and transition planning, farm loan programs, debtor/creditor law, water rights, and other relevant matters.  Here is an opportunity to obtain an experienced outside opinion on issues that may be affecting your farm or ranch.  Bring your questions!

August Clinic Dates and Locations:

North Platte – Thursday, August 10, 2017

Fairbury – Wednesday, August 16, 2017

Lexington – Thursday, August 17, 2017

Norfolk – Thursday, August 24, 2017

Valentine – Friday, September 1, 2017

To register for a FREE clinic or to receive more information about our services, call Michelle and the Rural Response Hotline: 1-800-464-0258.

These clinics are sponsored by the Nebraska Department of Agriculture and Legal Aid of Nebraska.

Legal Aid of Nebraska      Farm mediation

Ogallala FREE Workshop- FSA Disaster & Loan Programs (including limited liability entities) and The Nebraska Beginning Farmer Tax Credit Program

You are welcome to attend a free workshop on Farm Service Agency livestock disaster programs, direct and guaranteed loan programs, and the Nebraska Beginning Farmer Tax Credit Program. There is no charge for the workshop.

June 29, 2017 at the Petrified Wood Gallery (418 E 1st St, Ogallala) from 1pm-3pm

To register (and for questions) call the Rural Response Hotline at 1-800-464-0258.

The workshop will provide an overview of livestock disaster programs (LFP, LIP and ELAP) administered by the Farm Service Agency (FSA) and an overview of FSA loan programs (both direct and guaranteed operating and ownership loans, including those programs targeted at beginning farmers and ranchers, as well as the micro loan program and the recently expanded farm storage facility loan program). The workshop will also address some of the issues that arise under these programs when farm and ranches use limited liability entities as part of their business and/or succession planning. There will also be discussion of the benefits and requirements of the Nebraska Beginning Farmer Tax Credit program (NextGen), including requirements for use of this program by family members. The workshop should be useful for established farm and ranch owners, for their successors, and for beginners. (This program is also being offered for CLE credits to bar members.)

 Joe Hawbaker, Agricultural Law attorney, with Hawbaker Law Office, Omaha

Amy Swoboda, Food and Farm Attorney with The Beginning Farmer Project of Legal Aid of Nebraska

This workshop is made possible through the Nebraska Network for Beginning Farmers & Ranchers and the Beginning Farmer Project of Legal Aid of Nebraska, under an outreach grant from the Farm Service Agency, USDA. 

Beatrice FREE Farm Transition and Estate Planning Workshop March 1

You are welcome to attend a free workshop on business succession and estate planning for farm and ranch owners, families and beginners.   The workshop will be held in Beatrice, (March 1, 2017) at the Extension Office at the fairgrounds.  The workshop runs from 10:00 am to 2:30 pm.  There is no charge for the workshop.  To register (and for questions) call the Rural Response Hotline at 1-800-464-0258.

The workshop is about farm and ranch business succession and family estate planning.  It will include a discussion of beginning farmer programs that can aid in succession planning.  The workshop should be useful for established farm and ranch owners, for their successors, and for beginners.   Topics include:  stages of succession planning, contribution & compensation, balancing the interests of on-farm and off-farm heirs; the importance of communication, setting goals, assessing feasibility, and balancing intergenerational expectations and needs; beginning farmer loan and tax credit programs; the use of trusts, wills, life estate deeds and business entities (such as the limited liability company) in family estate and business succession planning;  legal tools for balancing the interests of successors and off-farm heirs; asset protection; taxation (federal transfer taxes, Nebraska inheritance tax, basis adjustment), and essential estate documents. 

Joe Hawbaker, Agricultural Law attorney, with Hawbaker Law Office, Omaha

Dave Goeller, Deputy Director, Northeast Center for Risk Management Education, UNL

This workshop is made possible by the Nebraska Network for Beginning Farmers & Ranchers, the Farm and Ranch Project of Legal Aid of Nebraska, USDA-FSA, National Institute of Food and Agriculture, the Nebraska Department of Agriculture’s Next Gen, Nebraska Farmers Union Foundation, UNL Extension Gage Co, and a lunch will be provided.

March Clinic Dates

Farmers and ranchers are invited to attend a FREE clinic.  The clinics are one-on-one, not group sessions, and are confidential.  The Farm Finance clinic gives you a chance to meet with an experienced Ag law attorney and Ag financial counselor.  These clinic staff specialize in legal and financial issues related to farming and ranching, including financial planning, estate and transition planning, farm loan programs, debtor/creditor law, water rights, and other relevant matters.  Here is an opportunity to obtain an experienced outside opinion on issues that may be affecting your farm or ranch.  Bring your questions!

These FREE farm and ranch clinics are being held in:

March Clinics:

Norfolk clinic – Friday, March 3rd

Norfolk clinic – Thursday, March 16th

Fairbury clinic – Monday, March 27th

To sign up for a clinic or for more information, call Michelle at the Nebraska Farm Hotline:  1-800-464-0258.

The Nebraska Department of Agriculture and Legal Aid of Nebraska sponsor the farm finance clinics.

Farm mediation                  Legal Aid of Nebraska

USDA is making it easier to transfer land to the next generation of farmers and ranchers.

Key points from the USDA’s announcement concerning the early termination of Conservation Reserve Program (CRP) contracts.

  • The goal is to make it easier for the next generation of farmers and ranchers, including family members, to acquire land.
  • USDA technical teams will determine which acres are ready to be productive with minimal impact on overall conservation efforts.
  • If land is determined to be ready a landowner can terminate their CRP contract early without being required to repay all previous payments plus interest.
  • This policy waives repayment requirements if the land is being transferred to a beginning farmer or rancher through sale or lease with the option to buy.
  • By clearing some of these CRP acres from the programs 24 million acre cap the USDA will be able to enroll other land with a higher conservation value.

For more information and details on this early termination opportunity visit www.fsa.usda.gov/crp or read the complete announcement at https://www.fsa.usda.gov/state-offices/Nebraska/news-releases/2016/stnr_ne_20161230_rel_408.

September Clinic Dates

Free clinics are available through the Farm Mediation program and Legal Aid of Nebraska.   In these clinics, participants can get one-on-one advice from financial and legal professionals about farm transition and financial issues.  The dates for September 2016 are:

Grand Island – Thursday, Sept. 1st

Fairbury – Friday, Sept. 9th

North Platte – Thursday, Sept. 8th

Norfolk – Friday, Sept. 16th

Lexington – Thursday, Sept. 15th

Norfolk – Tuesday, Sept. 27th

Please call the Rural Response Hotline 1-800-464-0258.

Updated June Clinic Dates

Free clinics are available through the Farm Mediation program and Legal Aid of Nebraska.   In these clinics, participants can get one-on-one advice from financial and legal professionals about farm transition and financial issues.  The dates for June 2016 are:

Grand Island – Thursday, 2nd

Broken Bow Workshop – Thursday, 9th

Geneva & Central City follow-up clinic – Friday, 10th

Norfolk – Thursday, 16th

Fairbury – Wednesday, 22nd

Kearney follow-up clinic – Monday, 27th

North Platte follow-up clinic – Tuesday, 28th

Valentine – Wednesday, 29th

Please call the Rural Response Hotline at 1-800-464-0258 to register.

April Clinics

Free clinics are available through the Farm Mediation program and Legal Aid of Nebraska.   In these clinics, participates can get one-on-one advice from financial and legal professionals about farm transition and financial issues.  The dates for April 2016 are:

Farm mediation

Grand Island – Thursday, April 7th

Norfolk – Thursday, April 7th

North Platte – Thursday, April 14th

Legal Aid of Nebraska

Lexington – Thursday, April 21st

Fairbury – Friday, April 22nd

Valentine – Thursday, April 28th

Norfolk – Friday, April 29th

Please call the Rural Response Hotline at 1-800-464-0258 to make and appointment.

September 1st and your leases

An oldie but goodie post as Nebraska farmers approach September 1st:

There is evidence that in Nebraska, most farm leases are oral year-to-year leases.  This is important because Nebraska law governs how to terminate such leases and September 1 is a critical day should a landowner wish to terminate an oral lease.

First, the law:

The Nebraska Supreme Court has ruled that a farm lease begins on March 1 for oral year-to-year leases.  To terminate an oral year-to-year lease, however, the Court has ruled that six months notice must be given prior to March 1.  In other words, to terminate an oral year-to-year lease, a notice to quit must be received by the tenant prior to September 1 of the preceding year.

Second, some examples:

Example 1:

The landowner as an oral year-to-year tenant.  Landowner decides she wants to terminate her lease with Tenant because she wants her nephew to rent the land beginning March 1, 2014. Landowner sends a letter to Tenant and Tenant receives it October 30, 2013.  Is the lease terminated so the nephew may rent it on March 1, 2014?

No, the lease is not terminated because an oral year-to-year lease requires a tenant to receive notice by September 1, 2013.  Here, Tenant received noticed from Landowner on October 30, 2013.  This means that Tenant may lease the farm land until August 31, 2014.

Example 2:

Same facts as above except now, Landowner sends a notice to quit to Tenant, which Tenant receives on August 30, 2013.  Is this lease terminated so the nephew may rent it on March 1, 2014?

Yes, the lease will terminate as of February 28, 2014.  Keep in mind the lease between Landowner and Tenant continues through February 28, 2014 but the Tenant has received a proper six months notice of termination, which is required under Nebraska law.

Third, some gotchas:

The above represent the default rules in Nebraska for termination of unwritten year-to-year leases.  The landowner and tenant can come to a mutual, voluntary agreement to modify the default rules.  Thus, if both the landowner and tenant agree, an unwritten year-to-year lease may end in June with 30 days notice.  The key is that there must be a mutual, voluntary agreement to do so.

If a landowner is terminating an unwritten year-to-year lease, it is advisable to do so with a letter and not in-person.  Additionally, it is best to send the notice to quit with time to spare from the September 1 deadline, as the tenant must receive the notice by September 1; it is not relevant when the landlord sends the notice.

Moreover, the above rules do not apply to written leases.  To terminate a written lease, the landowner and tenant must merely review what the lease states about termination and follow the lease provisions.

If you need clarification or just want to ask about dates and deadlines, you are welcome to contact us.  We’re happy to help Nebraska and South Dakota’s farmers and ranchers (both landowner and tenant!).

Buy-Sell Agreements and Your Estate Plan

For those in partnerships and closely-held corporations, the incapacitation, death, or retirement of an owner can cause much angst.  So to can the possibilities of bankruptcy, divorce, or an attempted sale to a person or entity unknown to the owners.  The role of Buy Sell Agreements to address such situations is critical to ensure the business continues without disruption by the business falling into the hands of an unknown third party.

A buy-sell agreement is a legally binding contract, usually found within the operating agreement of a business entity.  A buy-sell agreement represent a restriction on ownership; restrictions which are agreed upon or imposed as a condition of ownership.  Three basic types of buy-sell agreements exist: (1) a Redemption Agreement, in which the company itself purchases the departing owner’s ownership interest; (2) a Cross-Purchase Agreement, in which the other owners purchase the departing owner’s ownership interest; and (3) a hybrid of the first two approaches, in which the company and the owners each may buy the department owner’s ownership interest, but with one having the first right to buy and the other the second right to buy.

How does the buy-sell agreement work in practice?  It typically works as a right of first refusal.  For example, if the departing owner receives a bona fide offer to purchase her interest in the company, the departing owner typically must first establish through a written document that the offer is valid and binding.  This may require both a written offer and down payment.  The buy-sell agreement would then provide that the company has the first right to buy the ownership interest for the same terms, or for other terms as directed in the buy-sell agreement.  If the company does not exercise its right of first refusal, the buy-sell agreement may then provide that the other owners have a right of second refusal to buy the ownership interests on the same terms as offered to the departing owner, or for other terms as directed in the buy-sell agreement.  Detailed examples of the above are in the linked article — check it out if you are interested in more information.

Another critical concern with buy-sell agreement is the purchase price of the shares.  There are three basic approaches to determining price: (1) fixed price method, or an agreement among the owners are to the value of an ownership interest in the company; (2) a formula method, wherein the buy-sell agreement sets forth a formulaic method, such as net book value or capitalization of earnings, for determining the purchase price; or (3) appraisal.  Also worth considering when determining how to calculate price is also how the company can fund the re-purchase of shares.

Buy-sell agreements can also address possible tax consequences and allocation of taxes.  Again, detailed examples are in the linked article — it is worth reviewing if a buy-sell agreement is of interest to you.

A buy-sell agreement is not the only estate and succession planning tool but it is one worth considering as part of your estate and succession plan.  A good buy-sell agreement not only protects the family operation but also the family relationships that are necessary for the family operation to continue.