Month: August 2023

Not All Trusts Protect Assets

By: Robert Moore

How Do Retirees Define A 'Comfortable Retirement' And Should That Matter To You?

A common misperception is that all trusts protect assets from creditors, lawsuits, and nursing homes.  While some trusts do protect assets, many trusts do not.  In fact, most trusts are not designed to protect assets but instead to only transfer assets at death.  Knowing the difference between the different types of trusts is important to ensure that your trust meets your expectations for asset protection.

There are generally two different types of trusts – revocable and irrevocable.  A revocable trust is the typical estate planning trust most people use.  Because the revocable trust can be changed and assets transferred into and out of the trust, it provides no asset protection.  Essentially, if the owner/grantor can access the assets of the trust, then so can creditors.  If you can make changes to your trust and transfer assets in and out of the trust, you probably have a revocable trust.

An irrevocable trust can protect assets.  The concept of an irrevocable trust is to establish a trust that cannot be changed (with a few exceptions), transfer assets to the trust and then relinquish the right to withdraw the assets back out of the trust.  Additionally, someone else serves as the trustee to manage the trust assets.  Since the original owner of the assets no longer has access, control, or ownership of the assets, then creditors cannot access them.

It is important to keep in mind the five-year lookback rule for Medicaid.  This rule causes ineligibility for Medicaid for gifts that were made within five years of Medicaid application.  Due to this rule, establishing an irrevocable trust to protect assets from nursing home costs must be done well before the assets become at risk.

While an irrevocable trust is useful to protect assets, the irrevocable nature of the trust is a significant negative feature.  Once the irrevocable trust is established and the assets transferred, it cannot usually be undone.  Even if circumstances or goals change over time, the irrevocable trust stays in place and the assets stay in the trust.  A revocable trust, on the other hand, is flexible and can be changed as circumstances and goals change.

Sometimes a trust will include “revocable” or “irrevocable” in its name, making it obvious the type of trust.  However, many trusts do not indicate in the name if it is revocable or irrevocable.  In that case, the trust document must be reviewed to determine the type of trust.  Typically, within the first few paragraphs of the trust document, the trust will be clearly identified as either revocable or irrevocable.

Some estate plans include both a revocable and irrevocable trust.  Assets to be protected are transferred to an irrevocable trust and assets the owner wishes to retain control over are transferred to a revocable trust.  Having two trusts increase the costs of both setup and administration but it is an option for many people.

Anyone with a trust should verify the type of trust they have.  It is common that someone believes their assets are protected by their trust only to find out too late that they actually have a revocable trust and their assets are subject to nursing home costs.  A revocable trust can be converted to an irrevocable trust at any time prior to death.  If there is any doubt as the type of trust, review the trust with your attorney to be sure it meets your estate planning and asset protection goals.

Field Observations Thru August 11

Corn

Growth & Development

Corn development continues to vary throughout the county.  Last week I highlighted the R1 (Silking) growth stage.  R2 is the next stage, occurring approximately 10 days after silking.

R2 – Blister

  • Occurs about 10‐12 days after silking.
  • The kernel is visible  and resembles a blister

  • Clear fluid fills the kernel
  • The embryo is barely visible
  • Approximately 85% moisture content.
  • If severe stress occurs now or during R3, kernels can be aborted from the tip downward.
  • Kernel abortion will occur until the plant has a sufficient supply of carbohydrates for the  remaining kernels.

Scouting

Disease pressure throughout the county is very low.  SO … Do I spray or not?  This is literally the same decision that we had to make with our wheat crop this year.  Read more on disease scouting here.

Soybeans

Growth & Development

Like corn, soybean development continues to vary throughout the county.  Beans are looking much better than they were a few weeks ago. Last week I highlighted the R3 (Beginning Pod) growth stage.  R4 (Full Pod) is the next stage, occurring approximately 10 days after R3.

R4 – Full Pod

  • A 3/4 inch pod at one of the four uppermost nodes on the main stem
  • Rapid pod growth & beginning seed development
  • From R4 to middle R5 critical period for soybean yield potential
  • Flowering is complete
  • Pod abortion occurs naturally and allows the soybean plant to adapt to current environmental conditions.
  • Pod number and seed size affect yield more than seeds per pod.

Scouting

All of the bean fields that I have seen this week look very similar to this one.  I am seeing very little (if any) disease pressure.  Current and projected weather conditions may change  this.  As you continue to scout your bean fields, look for Sudden Death Syndrome, White Mold, and Frogeye Leaf Spot.  More information on scouting for these problems next week.

County Rainfall Update

Corn Water Requirements

Soybean Water Requirements

Sudden Death Syndrome (SDS)

Sudden death syndrome (SDS) of soybean can be found in fields around the Midwest but still has limited distribution in Ohio. Yield losses associated with SDS in Ohio have been highly variable depending on the timing and severity of the initial infection, subsequent weather conditions, timing of defoliation, and the level of soybean cyst nematode (SCN) infestation in the field.

Symptoms and Signs – Foliar:

The first observed SDS symptoms are often early leaf symptoms, including yellow spots between leaf veins, known as interveinal chlorosis.

 

These lesions may expand and turn brown as the spots expand between veins, which is called interveinal necrosis. Leaf veins remain green. As the disease progresses, leaves die and prematurely fall from the plant, while petioles remain attached to the stem. Pods and seeds may be aborted.

Foliar symptoms of SDS can resemble those of many other diseases. These symptoms can occur in fields with high levels of inoculum as early as the vegetative stage, but most often occur near the middle pod-fill stages (R3-R4).

Symptoms and Signs – Roots & Stems:

Infected plants can have discolored and decaying roots even if there are no noticeable foliar symptoms of SDS. The woody tissue in the taproot can be brown to dark gray, while the upper portion of stem pith remains white.

Disease Cycle:

The fungus that causes SDS survives the winter in crop residue and soil. Early in the season, the fungus infects soybean roots, sometimes within a few days of seed germination. Infection is favored by cool, wet soil conditions. The SDS fungus produces toxins that plants transport through their water-conducting vessels (xylem) up to the leaves, which results in foliar symptoms. Typically, these symptoms occur after flowering, but they have been observed during early soybean growth stages on highly susceptible varieties or when conditions are favorable.

Conditions that Favor Disease: Cool, wet field conditions shortly after planting favor early root infections and disease establishment. Frequent or heavy rains midseason can favor early symptoms.  Hot and/or dry conditions in the spring or summer can halt SDS development.

The presence of soybean cyst nematode (SCN) in the same field where SDS is found can increase the severity of SDS symptoms. Therefore, fields with SDS should be tested for the presence of SCN. Research has linked the presence of SCN with higher levels of SDS and increased yield loss. However, SDS can occur independently of SCN, and vice versa. Some crop production practices may also increase the risk of disease development. Fields with poor soil nutrients, low pH, poor drainage, or moderate to severe soil compaction are at higher risk of SDS.

Yield Loss and Impact: Yield losses due to SDS can be highly variable and depend on several factors, including the environment, the timing of symptom development, the susceptibility of a soybean variety to the disease, and the levels of SCN present in the field. SDS can weaken plants and cause premature defoliation — infected plants also may produce fewer and smaller seeds.

Yield losses can be substantial in years when susceptible soybean varieties are planted in cool, wet fields with a history of SDS and SCN. If symptoms develop later in the season, or weather is not conducive for disease development, yield losses can be minimal. Losses are rarely fieldwide since the disease often occurs in patches.  If foliar symptoms appear at or after growth stage R6, yield loss may be minimal.

Management: SDS management strategies include planting soybean varieties with SDS resistance, managing SCN, using effective fungicide seed treatments, improving soil drainage in fields with recurring SDS, rotating crops, avoiding or reducing soil compaction, and maintaining proper pH and fertility levels.

Weed of the week – Palmer Amaranth

Palmer Amaranth

Family: Pigweed, Amaranthaceae.

Life cycle: Summer annual.

Description: An erect summer annual that may reach 6 1/2 feet in height. Palmer amaranth closely resembles many other pigweed species,

Seedlings:  Stems below the cotyledons (hypocotyls) are without hairs (glabrous), and are often red in color. Cotyledons are narrow and green to reddish in color on the upper surface. Lower surfaces of cotyledons have a reddish tint. First true leaves are alternate, ovate in shape, and are slightly notched at the tip of the leaf blade

Roots: Taproot that is often, but not always, reddish in color

Stem: One central stem occurs from which several lateral branches arise. Stems are without hairs and can appear glossy.

 

 

Leaves: Alternate, without hairs (glabrous), and lance-shaped or egg-shaped in outline. Leaves are 2 to 8 inches long and 1/2 to 2 1/2 inches wide with prominent white veins on the undersurface. Leaves occur on relatively long petioles.

Flower/Seedhead: Small, green, inconspicuous flowers are produced in dense, compact, terminal panicles that are from 1/2 to 1 1/2 feet long. Smaller lateral flowers also occur between the stem and the leaf petioles (leaf axils).  Male and female flowers occur on separate plants. Each terminal panicle contains many densely packed branched spikes that have bracts that are 3 to 6 mm long; can produce 500 thousand to 1 million seeds per plant.

Similar Plants: Loosely resembles many other pigweed species. Palmer’s petioles are as long or longer than the actual leaf. This plant is hairless and has elongated seed heads. Leaves are typically more diamond shaped than other pigweed species, and occasionally has one hair at the tip of the leaf.

The Problem is……..Palmer amaranth is one of the most difficult weeds to control in agricultural crops.  It developed a major glyphosate resistance problem in the southern US from 2006-2010, and has been spreading in the midwestern US since, causing crop loss and increases in weed management costs. Characteristics that make it a successful annual weed include: rapid growth rate; wide window of emergence (early May through late summer); prolific seed production (upwards of 500,000 seeds/plant); tendency to develop herbicide resistance; and tolerance to many post-emergence herbicides when more than 3 inches tall.

Corn Fungicides … To Spray or not to Spray

All of the corn fields that I have seen this week look very similar to this one.  I am seeing very little (if any) disease pressure.

SO … Do I spray or not?  This is literally the same decision that we had to make with our wheat crop this year.

A fungicide application will cost will cost in the neighborhood of $20 – $25 per acre.  At the current corn growth stage will this application pay?

Most corn studies have found the greatest yield benefit from a fungicide application to be at the VT (Tasseling)   to R1 (Silking)  growth stages. Intuitively, this makes sense since this is typically a time of high disease pressure, and the tissues we want to protect most are present and active. The ear leaf and those leaves that are younger are the solar panels that generate the sugars that then fill the grain. These later applications take us further into the season with the protection of this foliage.

Continued scouting is needed, especially in fields with susceptible hybrids and a history of foliar diseases. These 3 diseases are the most prevalent this time of year.

Gray leaf spot: symptoms of GLS include tan, rectangular lesions up to 2-4 inches long that first appear on lower leaves. Lesions are bordered by leaf veins and can turn gray later in season. Infection requires dew or foggy conditions and high relative humidity in the canopy.

Tar spot:  this relatively new foliar disease prefers wet weather and moderate temperatures and can progress rapidly under the right conditions. The main signs of tar spot are raised, black spots called stroma that cannot be rubbed off and appear on both upper and lower leaf surfaces.  In general, fungicides with multiple active ingredients (AI) are more effective against tar spot and should be applied between VT and R3 in a high disease environment (>5% severity).

Northern corn leaf blight:  keep an eye out for tan, “cigar-shaped” lesions (Figure 3) that will expand up to six inches in length across leaf veins. NCLB is favored by high relative humidity and wet, but slightly cooler conditions than those that favor the development of GLS.

Corn Fungicide Options for 2023

Farmers Remain Cautiously Optimistic About Agricultural Economy

Source: James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture

Click here to download the full report.

Agricultural producer sentiment improved slightly in July as the Purdue University-CME Group Ag Economy Barometer rose two points above its June reading to an index value of 123. This month’s two-percent rise in the barometer was primarily the result of farmers’ improved perception of current conditions on their farms as the Index of Current Conditions rose 5 points to a reading of 121. The Index of Future Expectations changed little compared to June, rising just one point to 124. This month’s Ag Economy Barometer survey was conducted from July 10-14, 2023.

Farmers’ rating of financial conditions on their farms was virtually unchanged in July, compared to June, as the Farm Financial Conditions Index rose just one point to 87 vs. a reading of 86 in June. Looking back to May, however, the percentage of producers rating their farm’s financial performance as better than last year improved from 14% to 17%, while those rating financial performance as worse than a year ago fell from 38% to 30% of respondents. When asked to look ahead one year, there was a one percentage point increase in farmers expecting farm financial conditions to improve in July vs. June and, correspondingly, a one-point decline in the percentage of farmers expecting conditions to worsen. And farmers’ longer-term perspective on the U.S. agricultural economy improved somewhat in July, as the percentage of respondents expecting bad times in the upcoming 5 years fell from 41% in June to 39% in July.

Figure 1. Purdue/CME Group Ag Economy Barometer, October 2015-July 2023.
Figure 1. Purdue/CME Group Ag Economy Barometer, October 2015-July 2023.
Figure 2. Indices of Current Conditions and Future Expectations, October 2015-July 2023.
Figure 2. Indices of Current Conditions and Future Expectations, October 2015-July 2023.
Figure 3. In a year, will your farm operation be better off financially, worse off, or about the same as now?, October 2015–July 2023
Figure 3. In a year, will your farm operation be better off financially, worse off, or about the same as now?, October 2015–July 2023

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Ohio Crop Progress

Last week, warm and dry conditions dominated across the State, according to Ben Torrance, State Statistician, USDA NASS, Ohio Field Office. The most recent U.S. Drought Monitor report showed 18.5 percent of the State as abnormally dry or worse, a decrease from the previous week. Conditions matching the moderate drought rating were observed in 1.7 percent of the State. Topsoil moisture conditions were rated 2 percent very short, 23 short, 71 percent adequate, and 4 percent surplus. Statewide, the average temperature for the week ending on August 6 was 71.3 degrees, 0.7 degrees below normal. Weather stations recorded an average of 0.17 inches of precipitation, 0.65 inches below average. There were 6.1 days suitable for fieldwork during the week ending August 6.

While crop condition ratings improved, crop progress for corn and soybeans remained near or behind the five-year average for the majority of the State. Southwestern counties experienced below-average moisture levels, leading some farmers to report crop stress. Corn silking progress reached 87 percent and corn dough progress was 20 percent complete. Soybeans blooming was 82 percent complete and pod setting progress reached 48 percent. Corn and soybean condition were 73 and 67 percent good to excellent, respectively. Oats were 95 percent harvested. Second cuttings of alfalfa were 93 percent complete, and second cuttings of other hay were 67 percent complete. Third cuttings of alfalfa hay and other dry hay were 32 and 22 percent complete, respectively. Pasture and range condition was rated 67 percent good to excellent, up from the previous week. Livestock were reported to be in good condition, benefitted by seasonally moderate temperatures and improved pasture.

Your Trust and Retirement Accounts

By: Robert Moore

How Do Retirees Define A 'Comfortable Retirement' And Should That Matter To You?

Revocable trusts are an important estate planning tool that is utilized in many estate plans.  Most assets can be held in a revocable trust but there are exceptions.  One such exception is retirement accounts like an IRA, 401k or 403b.  These types of accounts should not be owned by a trust and a trust should only be the beneficiary in limited circumstances.

A qualified retirement account can only be owned by an individual.  There are many rules and restrictions related to changing the ownership of a retirement account.  If you transfer a retirement account to your trust, there will likely be penalties assessed and income tax due.  Do not transfer ownership of your retirement account without consulting your tax advisor and financial advisor.  Generally, transferring a retirement account to a trust is not advised.

A trust can be made the beneficiary of a retirement account but, again, caution should be used.  Trusts usually pay higher income tax rates than individuals.  Also, it is often easier for an individual to manage an inherited retirement account than it is for a trustee to manage a retirement account on behalf of a trust.  So, it is usually best to have retirement accounts inherited directly by the beneficiaries rather than be held in trust for beneficiaries.

There are times when naming your trust as the beneficiary of a retirement account is appropriate.  The potential for higher taxes and more cumbersome administration can be offset if the retirement accounts should be managed by the trustee due to concerns with the beneficiaries.  Some situations that might justify using a trust as a retirement account beneficiary include minors as beneficiaries, concerns with marriage of beneficiary, the beneficiary’s inability to manage assets and providing creditor protection.  Particularly when a retirement account may involve large amounts of money and concerns about the beneficiary, naming the trust as the beneficiary may be warranted.

In all situations, the retirement account should have at least one beneficiary named.  If no beneficiaries are named, the account will go through probate and the administration burden on the executor and trustee will be significant.  Be sure to double-check all retirement accounts to be sure a beneficiary is named.

The integration of retirement accounts in estate planning is an important component of most people’s attempt to transfer assets to the next generation.  Be sure to discuss your retirement accounts with your attorney, tax advisor and financial advisor.  Making changes to the beneficiary designations of retirement accounts is a relatively easy process but knowing whom to name as the beneficiary should include careful analysis and consultation with your advisor team.

Ohio Supreme Court decision explains eminent domain procedures

By: Peggy Kirk Hall, Attorney and Director, Agricultural & Resource Law Program

When a landowner legally challenges an agency’s use of eminent domain to appropriate property, Ohio law requires a trial court to hold a hearing to determine the agency’s right to make the appropriation, according to a recent decision by the Ohio Supreme Court. The Court held that an appeal to a higher court is not permissible until the trial court holds such a hearing and rules on the issues raised in the hearing. For landowner Diane Less, the ruling means the trial court–the Mahoning County Court of Common Pleas–must hold a hearing to determine whether Mill Creek MetroParks had the right to make the appropriation of her land and whether that appropriation is necessary.

The case is one of several lawsuits and long-running controversies over Mill Creek MetroPark’s use of eminent domain to appropriate land for a bike path. The Mahoning County disputes are one reason behind a current legislative proposal to revise Ohio’s eminent domain laws, which includes a prohibition against the use of eminent domain for recreational trails. The legislation is at a standstill, however, with many opponents lining up against the recreational trails and other provisions of the bill.

Basis for the decision

The current Mill Creek MetroParks v. Less case made its way to the Ohio Supreme Court after the Seventh District Court of Appeals reversed the Mahoning County court’s summary judgment decision that MetroParks was authorized to use eminent domain to take Less’ land. MetroParks appealed that decision to the Ohio Supreme Court. But rather than addressing the issue of authority to take the land, the high court focused on the procedures outlined in Chapter 163 of the Ohio Revised Code. The statutes “provide a uniform eminent domain procedure for all appropriations sought by public and private agencies,” including procedures for when a property owner contests an appropriation. The Court reviewed the statutory requirements in ORC 163.09, which require a trial court to hold a hearing when:

  1. A property owner files an answer to a petition for eminent domain that specifically denies the right to make the appropriation or the necessity for the appropriation,
  2. The answer alleges sufficient facts in support of the denial, and
  3. The appropriation is not sought in a time of war or other public exigency or not for the purpose of making or repairing roads.

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