Law Firm: Scarpetti & Scroggins, New Hampshire
Licensed to Practice: Maine, Massachusetts, New Hampshire
Practice Areas: Estate Planning, Elder Law
“A plan is everything – not planning is likely to end up with a disaster.”
On tackling issues in farm succession:
Kathryn Williams is an estate planning and elder law attorney with Scarpetti & Scroggins in New Hampshire, a company whose mission is client preservation and conservation of wealth. For the last 20 years, Kathryn has assisted families through intergenerational transition plans. Many of the transition plans Kathryn has created are for farm families. Kathryn notes that although farming itself is unique, many of the issues involved in transitioning wealth are the same as when planning for the transition of any family businessfor farming and non-farming businesses. She One unique aspect of farm transitions, though, is the challenge of creating succession plans when the farm thinks the biggest challenge to creating succession plans for farming businesses is that the land itself is often the most client’s most valuable asset. Often,This is a challenge because it is often difficult to discern how valuable the farm land is because 1) many farmers are unwilling or unable to pay for expensive appraisals of the land, 2) the appraised value of the land can vary from appraiser to appraiser, and 3) . eEven when an appraisal is done, , appraisers may not base their assessment on the agricultural value of the land. Instead, appraisers are often basingoften base their land value assessments on the what is deemed to be the “highest and best use” of the land, which might involve letting the land goputting the land into development, rather than remaining instead of preserving it for in farming.
In addition, there can be variation between appraisers. Kathryn also cautions that attorneys assisting families with a farm succession plan should always make sure that the land is surveyed, especially with parcels that have been passed down through many generations.; Ooften, there are may be informal easements or other familial arrangements that should be recorded and could impact the value of the land..
Kathryn also tells attorneys working in this area that:, “A plan is everything – not planning is likely to end up with a disaster.” She says the most common scenario involves farming parents who decide to leave everything to their children in a will and let the children sort it out, which, Kathryn cautionssays, “is not a good idea.” In order to get her clients to talk create a succession plan, Kathryn sits down with them to talk about their goals and the details involved. For example, she will say to her clients, “Bring me through what you envision 20 years from now? Who is working on the farm? Where are you working or living? Who are the players managing and working the farm? Do you want to retire? If so, when? How much money do you need from the farm in order to do so?”
Kathryn also notes that working in this area is not as simple as an attorney drafting a plan, handing it to the clients, and then the clients walk out with everything resolved. Often, an attorney will be involved in family meetings between the parents and the children and may need to act in a mediator or negotiator- type role. Kathryn always advises the families that she represents the interests of the parents and cannot also represent the children due to conflict of interest rules. Even though she represents the parents in these scenarios, she says soliciting input from the children is critically important to drafting the succession plan – both from the children who might want to take over the farm and the children who do not want to farm. Determining what the clients want and helping them talk through the issues is key. Then Only then, Kathryn says, can the an attorney can become a joint problem-solver in preparing a legal resolution for the succession of the farm and the business.