10 Tips On How To Get Started On Estate Planning For The Family Farm Or Ranch

10 Tips On How To Get Started On Estate Planning For The Family Farm Or Ranch

1. Stop procrastinating!
Almost any estate plan is better than no estate plan at all. Please call our office for a complimentary questionnaire that will help you organize the information you need to gather and jump start your estate planning.

2. Plan for life and death.
Business owners know death is inevitable, but often fail to consider that it is often necessary for someone to step into your shoes and make decisions during incapacity. You never know when you may be unable to speak for yourself. With proper planning, there are a variety of tools, including a durable power of attorney, which can be used to continue your business upon your incapacity.

3. Carefully inventory assets.
While many people believe that their estate planning documents will ultimately control who gets what when you die, it is important to understand that many assets are transferred based on provisions which both contradict and supersede those contained in a will or trust. Property such as bank accounts, certificates of deposit, IRAs, annuities, life insurance policies and real estate can pass by beneficiary designation or operation of law depending on how the property is titled.

4. Beware of potential tax implications.
Consult a qualified estate planning attorney to ensure that you have a good understanding of the current tax rules as they relate to the size and scope of your unique mix of assets. Currently, a married couple can pass over $10.9 million dollars (indexed for inflation) of assets free from federal estate taxes.

5. Equal is not always fair.
Estate plans commonly give all assets equally to children. Plans for farmers and ranchers often require more customization and additional consideration of fairness of distributions. Giving equal farmland shares to on-farm and off-farm heirs can be a disaster. Equal distribution often fails to acknowledge the contributions made by the on-farm child who has likely spent years contributing labor and management to the operation. If fairness is your goal, your attorney can offer advice to help equate the on-farm child’s contributions to building equity in the farm.

6. Check liquidity levels.
Consider the costs of your funeral and final medical expenses. There will also be a cost to settle your estate, be it probate or trust administration fees. Cash may also be needed to continue the farm work at the time of death prior to final estate settlement.

7. Maintain good records.
When you leave detailed and well-organized records, the personal and legal procedures at the time of your incapacity or death will be less time-consuming, expensive and frustrating for those you leave in charge.

8. Build your team.
It is important to build relationships with a comprehensive team of legal, accounting, tax, financial, insurance and real estate professionals.

9. Communicate the plan.
Share the essential aspects of your estate plan with your family. Doing so often heads off conflict and hard feelings among family members.

10. Keep your plan current.
Review your estate planning documents regularly. Certain life events should trigger your review: birth, death, divorce or adoption of a child, incapacity or death of a spouse, changes in asset values, deterioration of health or retirement. We offer our clients a complimentary review of their estate plan after three years so that adjustments can be considered based on changes in family dynamics, probate and tax laws.

Hyatt McIntire & Associates