November Clinic Dates

workshopsFarmers 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:

Grand Island – Thursday, Nov 2nd

Norfolk – Thursday, November 9th

Valentine – Friday, November 10th

Fairbury – Friday, November 17th

Norfolk – Thursday, November 30th

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

October 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!

October Clinic dates and locations:

Valentine – Wednesday, October 11th

Norfolk – Thursday, October 12th

Fairbury – Thursday, October 26th

Norfolk – Tuesday, October 31st

To register, please call the Rural Response Hotline at 1-800-464-0258.

September 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:

September Clinic dates:

Valentine – Friday, September, 1st

Norfolk – Wednesday, September, 6th

Grand Island – Tuesday, September, 19th

North Platte – Wednesday, September 20th

Norfolk – Tuesday, September 26th

Fairbury – Tuesday, September 26th

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.

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. 

FSA Disaster and Loan Programs- Grand Island- FREE WORKSHOP

Date- Tuesday, June 6, 2017
Time- 10:00am- noon

Location– Hall County Extension Office, Grand Island

The workshop will cover Farm Service Agency livestock disaster programs, direct and guaranteed loan programs, and NextGen (Nebraska Beginning Farmer Tax Credit Program). It is intended to be useful for established farm and ranch owners, their successors, and for beginners.

To register or for questions, call the Rural Response Hotline at 1-800-464-0258.
Topics include:
  • FSA livestock disaster programs
    • Livestock Forage Program (LFP)
    • Livestock Indemnity Program (LIP)
    • Emergency Livestock Assistance Program (ELAP)
  • FSA loan programs
    • both direct and guaranteed operating and ownership loans including those programs targeted at beginning farmers and ranchers\
    • micro loan program
    • the recently expanded farm storage facility loan program
  • Will address some issues that arise under these programs when farm and ranches use limited liability entities as part of their business and/or succession planning
  • Benefits and requirements of NextGen (Nebraska Beginning Farmer Tax Credit Program), including requirements for use by family members.
Presenters
  • Joe Hawbaker, Agricultural Law Attorney, Hawbaker Law Office, Omaha
  • Amy Swoboda, Food & Farm Attorney, Beginning Farmer Project, Legal Aid of Nebraska
These workshops are 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.

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

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.

 

USDA Expanding Opportunities for Beginning Farmers

The USDA announced yesterday new and exciting changes (read: opportunities) for beginning farmers, effective November 7.  Below are a quick list of the changes, which will be discussed in further depth in later blog posts:

  • The borrowing limit for microloans increases from $35,000 to $50,000;
  • Simplified procedures for lending;
  • Updating “farming experience” to include other experiences;
  • Expanding eligible business entities to reflect changes in how family farms and ranches or owned and operated.

More information from the USDA may be found here.

Pass-through taxation

You may have heard about the advantages of “pass-through taxation” when discussing certain types of business entities with your neighbors, other producers, your lawyer, or accountant.  But what exactly does pass-through taxation mean?

To explain pass-through taxation, we have to begin at the different types of business entities.  The simplest business entity is the sole proprietorship.  This is when a person does not have a distinct business but rather, just combines business income with personal income.  The taxes due for the business income are included on the person’s personal income tax information.  This is pass-through taxation — the tax passes through to the person’s own income tax and the business itself does not pay taxes.

A slightly different idea, but the flip-side to pass-through taxation, is the “double taxation” problem.  This is when a corporation, known as a C-Corp, first pays income taxes and then shareholders also pay taxes on any gain or dividend the shareholder receives.

Pass-through taxation avoids the double taxation problem.  The income from the pass-through business entity “passes through” to the individual(s) who have shares/ownership/income interests in the business entity and the individual then reports the income on their own federal income tax return.

It is always worth consulting your CPA for the finer details and possible outcomes when making a choice of entity decision for your operation.  However, it is worth knowing some of the terms of art with regards to business entities and pass-through taxation is one of the cornerstones.  There is nothing wrong with exploring all possible options for the type of entity for your operation and exploring any possible tax advantages or consequences; you never know unless you ask about pass-through taxation!