Costello honored as Attorney of the Year
LAKEFIELD — Patrick Costello, a senior partner in Costello, Carlson, Butzon & Schmit LLP in Lakefield, was recently honored by Minnesota Lawyer as one of its 2018 Attorneys of the Year. Costello was singled out for Outstanding Service to the Profession for his integral role in changing Minnesota law to allow charitable organizations to own farmland. The law change in 2004 resulted in the formation of the Southwest Initiative Foundation’s Keep It Growing program.
The program makes it possible for individuals, most often those without descendents or little connection to distant relatives, to donate their farmland to the foundation. Doing so allows the landowner’s tenants to continue to farm the land, while knowing the rental income generated will benefit others.
Costello dedicated about 30 years of his career to seeing his idea become a reality, and it’s all because he made a promise to a client who wanted to know his farm would be cared for.
“The client (Frank J. Zaher) asked me to keep his farm and to use his income for charitable works — to lighten people’s load and do some good in the world,” recalled Costello earlier this week. Zaher was a bachelor farmer in Minneota Township, Jackson County.
“I started by going to the Southwest Initiative Foundation almost from the very beginning,” Costello said. “I said I had this great idea, but it’s not permitted under Minnesota law.”
Eventually the law changed, and soon thereafter, SWIF established Keep It Growing. Today, the program has received 1,730 acres of farmland through eight separate gifts.
Serving in a rural law office, Costello has assisted numerous clients in making plans for their farmland, and said most choose to wait until after their death to have the farm transferred, but that doesn’t have to be the case.
They may opt to give their farm to the charitable organization while living, and retain the revenues the land generates until their death. Costello said the program provides the landowner with a tax deduction, and it also eliminates the estate tax.
He estimates there will be hundreds more acres enrolled in Keep It Growing during the next 20 years.
“More farmers have estate plans — they do love their farms more than their distant relatives,” he said.
SWIF isn’t the only one offering a way for farmers to donate their land to perpetuate charitable giving. Costello has visited four other initiative foundations and spoken to similar organizations in South Dakota, Nebraska, Kansas and Iowa.
In each case, the donor can specify where they would like the income to go. Through Keep It Growing, individuals may choose a specific organization or have the funds placed in an unrestricted endowment of the foundation.
“SWIF has a lot of small community foundations that they’re the parent of,” Costello said, noting one example where an individual has specified all proceeds from farmland rent must go to the Heron Lake-Okabena Community Foundation.
Costello, who was a bachelor for 55 years, said when he began introducing the idea to some of the single farmers, he was surprised by how quickly they embraced the idea.
“It’s been great fun, giving away money,” he added.
Costello was nominated for the Attorney of the Year title by SWIF, the organization that honored him in 2016 for his work with Keep It Growing. Back then, SWIF CEO Diana Anderson shared, “Pat has helped define what community philanthropy means in southwest Minnesota. He understood before anyone that the generational transfer of wealth could see millions of dollars leave the region as it passed to heirs or charities outside of our region.
“His vision for community foundations to keep and manage farmland has been the single most important charitable innovation in our history … and perhaps in all of rural philanthropy.”
Costello accepted his award during a Feb. 13 ceremony and was joined by his wife, Marcy, and SWIF’s Anderson.
A native of Lakefield, Costello grew up in his father’s Main Street pharmacy. He was in the sixth grade when he decided he wanted to become a lawyer.
At the time, Judge Holton had an office above the bank in Lakefield, and Costello knew that his job was to give advice to people. It sounded like a good career to him.
Costello went on to attend Hamline University and Creighton University School of Law. He returned to Lakefield and joined the law firm of Muir, Lundblad, Meyer, Storey, Stier and Simons in 1977, which is now known as Costello, Carlson, Butzon & Schmit LLP.
“I’ve always felt very much that this is where I belong,” Costello said of returning to his hometown to practice law. “I think that it’s really the best choice I ever made.”
Costello’s career in law spans more than 40 years, during which his work has focused on estate and business planning, agricultural law and taxation. He is a past president of the American Agricultural Law Association and is a fellow of the American College of Trust and Estate Counsel. He also serves as trustee for several private charitable foundations and is a director for the Minnesota State Bar Foundation.