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Planning aging while you are competent and able to find suitable help is paramount to your success in later years.
 
An Iowa criminal case that finished up its appeals process recently, shows us how elderly individuals can be easily abused, both physically and financially. In this case, Mr. Bean, an non relative care giver was convicted of   involuntary manslaughter, two counts of second-degree theft, neglect of a dependent person, and two counts of dependent adult abuse.
 
Here are the facts: Bean rented farm property from a brother and sister without close family. He got himself appointed as power of attorney holder and named beneficiary under their wills and became a contract purchaser of the pair's property at below market value. When Bean did get a bank loan to pay off the contract purchase, he used his power of attorney to give the sale proceeds right back to him and his wife. Bean paid his personal bills with the pairs funds.  After the brother's death,   Bean relocated the sister to a remote farm house and lived with her. The sister, from the time of the move until her death received no medical attention, even though she had been previously prescribed medication for a variety of issues. In the year she lived with her power of attorney holder before her death, her weight went from 134 pounds to 74 and her right arm had been broken, but had never been set. She had   broken ribs and bruising.   
 
How can this happen in Iowa? Easy, when a person executes certain duties under a financial power of attorney for another individual, the courts have a very limited ability to review those actions.  Bean isolated this couple and took advantage of them with no checks on balances on his authority and power. We as a society have no positive duty to act without a relationship to another person. That means that it is not crime to watch someone get wounded or worse if you don't owe that person a duty (like a power of attorney, guardian, care giver, etc, etc). We in Iowa have a mind your own business attitude. Coupled with the privacy laws and policies, often times people can see a piece but not enough to see the trend.

First, before we can talk about succession planning, we need to establish that the current generation wants someone to succeed them on the farm. From the Iowa State Surveys, 75% of farmers haven’t identified a successor no data on 25% who had identified them, if they had told the successor. Nearly 50% of farmers indicate that semi-retirement (withdrawal of some labor and management) is a close as they plan on getting to retirement. Another 30% plan to never stop providing labor and management to the farm.

If the farm operator never plans to quit really working, it makes it hard to plan to hand it off in life or death. Again, from Iowa State surveys, it appears that over 40% of farm operators are not talking to anyone regarding an exit plan of any type.

If you fall into this category of never planning to retire and not making any plans regarding transition, you are doing your family a disservice.  It is leaving the next generation dazed and confused regarding the future when you do die.

Having the Conversation about succession planning.

Consider whether you are having a family conversation or a business conversation. Discussion about farm succession choices before the turkey is served or the grandson hits the football field are going to be muddled, confused and not yield the result that anybody intended. Consider having the business discussions some other place than the kitchen table. It will help define that in this discussion you are not relating to one another as family but as business operators.

Everybody likes progress, cheap commodities like food, water and energy and nobody likes change. These are truths that can be bet upon time eternal regardless of what region of the country you are in. This is called the NIBY principle. Not In My Back yard.

Yet,  in order to achieve cheap commodities, quick access to what we want, infrastructure has to be in place. This year, BNSF railroad hauled nearly 1 million car loads of ag commodities across the country, with rail traffic into Minnesota , Montana and the Dakotas increasing by 31% in the last 5 years and outgoing traffic increasing b y 69%.  The oil production boom has something to do with  those numbers certainly.  All that traffic means more demand for existing rail space and the thought of more rail lines.

I doubt anyone is lining up to allow railroads to cut their fields up into smaller parcels. The same holds true for the Rock Island Clean Line energy lines. This project will deliver 3500 megawatts of energy from Northwest Iowa to Illinois and other eastern states over 500 miles. While many landowners will eventually give easements, others will not be swayed. We use eminent domain as a process to allocate between the rights of an individual and the needs of society for improvement and progress. This process is a lengthy one. In February , the proponents of the energy line asked the Iowa Utilities board to approve their concept and plan and then allow them to go back in to use eminent domain for the parcels that would not sell. This was not allowed by the board. If it had been, the leverage the energy line would have been able to bring to bear would be large. It is much easier to take away one parcel from the unwilling when all others have already given in and been paid. It is a far more difficult row to hoe when many parcels are not yet secured. Currently 1248 objections have been filed to the line and less than 15% of the proposed route has been secured via voluntary easements.

When I first moved to Sumner as a kid, I was asked to be in a rock group. I said I preferred country music. It turns out the rocks are here EVERY year and you get paid to pick them up, which was a change from my earlier experience in the hills of Clayton County. Tis the season of rock picking, hay making and detasseling is not far behind. While this work isn’t as readily available as it once was, it still plays an important part of our local economy.

Whether a child who is a dependent has to file his or her own return generally depends on two easily determined factors: whether the money is earned or passive and the amount of income. That is, for most kids, did you put it in the bank and watch it grow or did you get your hands dirty or give up your time to get the money.

The rule for children and other dependents is that if the only income is earned and it is less than $5,700, there’s no need to file a federal income tax return.

Even if your child doesn’t have to file a federal income tax return, he or she may want to file a return if federal income tax was withheld from income. This doesn’t usually happen for farm jobs or babysitting, but it might if they fill out the W4 wrong at the fast food restaurant. Your child might also want to file if he or she qualifies for certain credits which would result in a refund.

The rules are different for unearned income like dividends and interest. It is referred to as the “Kiddie Tax”.  For children under the age of 18, or under the age of 23 while a full time student, the first $950 is considered tax-free and the next $950 is taxed at your child’s rate. Unearned income over $1,900 is taxed at the child’s parents’ tax rate  

Friday, July 01, 2022
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill is the assistant Fayette County Prosecutor and a certified family law mediator. Jill still has ties to her family farm operation which includes a dairy herd. Jill Dillon focuses on bankruptcy, adoptions, and mediations.

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