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the parents’ off-farm investments

intact, he notes. The mortgage would be paid off, if the rate of interest holds at 2.75 per cent, in 16 years. This is a benchmark, of course, and not a prediction, Forbes cautions.


“The only question we have to resolve is what is fair to the non-farming children,” Forbes says. “I think that it would be fair to give the children $150,000 each. That can be obtained from the life insurance I have recommended plus payments out of non-registered assets, which, at $200,000 today, are likely to grow substantially by the time the parents pass away. The son will retain the farm, of which he already has 40 per cent. That share will grow as time goes on to 100 per cent.”

The 160-acre parcel that is not in the farming corporation can be transferred to a daughter who wants to start a market garden operation of her own. If the parents carry through with this transfer, which would also be tax-free, then the cash she would otherwise receive could be redistributed and added to the sums for the remaining four children. This move would preserve the financial equity of the transfers.

“This estate plan would be fair for Terrence and Wendy and for their children,” Forbes says. “There would be no capital gains taxes on the transactions because all of the land is qualified farm property. The only significant costs would be in the increased life insurance coverage that I have recommended



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