Written by David Payne – Estate Planning Attorney, Ozarks Legacy Law
As featured in JRS Cattlemen’s News – November 2022 Issue See Article
Those without a plan don’t last.
Your farm is more than just your home. It’s more than just a business. It’s your way of life, and the farm and land are the lifeblood of your family’s legacy. If that legacy is to continue, mindful estate planning of your farm’s operation must be a priority. Estate planning done right enables the following generations to continue your family’s evermore, unique way of life.
There is a difference between estate planning and succession planning, but they both must be done right. Both types of planning make sure you have a comprehensive plan that accomplishes your goals and continues your farming legacy. Mindful and effective farm succession planning for both management and ownership is necessary to lay the groundwork for a smooth transition.
I get it. It seems daunting and maybe overwhelming. The stakes are high and getting it wrong isn’t an option. The consequences are real. Family conflicts and the devastation of probate courts must be avoided. For more than 20 years as an estate planning attorney for farmers all across southwest Missouri, I’ve seen how successful families navigate these challenges and have helped guide them through the transition from one generation to the next.
While not all farmers and ranchers have complex estate planning needs, most do. The recent increase in land values makes these issues even more challenging. How do you treat kids who put in “sweat equity” and how do you deal with kids who don’t have any interest in coming home to the farm? Is it fair to force your children to decide who inherits the land, the equipment, the livestock, and other assets? Or worse, do you want a probate judge deciding all these things and deciding to sell it all at a public auction?
Where do you start in your estate planning?
You know your family is counting on you. Decide estate planning is a problem worth fixing and something you’re done putting off. Whether you’re early into building your farm or starting to think of slowing down, the problems that surround estate planning won’t go away without dealing with them head-on. Best to make hay while the sun shines.
So, if you know you’ve got a problem and know it’s worth fixing; if you have a legacy to protect with a spouse, kids, and grandkids counting on you, what needs to be done?
This is not a do-it-yourself project. This is not about filling in some blanks on a form over the internet. Of course, you need an attorney who will draft all the documents, but also (and most importantly) an attorney who will guide you through the years that bring prosperity and in times of transition. So, ask others who they have used. Look for someone local, if possible. Ask your accountant, your insurance agent, your financial advisor, etc. Ask someone you trust. Do your research.
This is important, so get it right.
You don’t need to have it all figured out.
Your estate planning attorney will best serve you if you engage with them as early as possible. While you will plan just one estate (your own), hopefully, the attorney you choose will have successfully planned for hundreds of farm families through the years. So, it is best to use that experience in your favor. Often, an experienced advisor can suggest a few ideas of how to best make the important choices you’ll face.
Your estate planning expert will ask a lot of questions: Do you have a successor in mind? How do you want to treat off-farm heirs? How do you want to shift management control and asset ownership – quickly or slowly or at a set point in the future? Do you need an LLC? An estate planning expert will want to know your business structure, your family dynamics and possible future managers and decisions makers.
Time to build some fence.
Good fences make for good neighbors, right? Estate planning and farm succession is all about creating good fences for your family. Good fences let everyone know what’s to happen and “who gets what” both how and when. By making these types of choices now, you’re building the fences of the future for you family. This way your children will have clarity, and so many conflicts will be avoided before they even start.
An experienced estate planning attorney will help frame the issues, so you can make the choices that must be made to protect your farm, your family and your legacy. Avoiding probate is often the most basic step in estate planning. But strategic, mindful planning is critical for avoiding unforeseen circumstances.
Turmoil, resentment, and conflict is best avoided by making wise choices now, rather than letting those issues linger for the next generation to sort out.
Contact Ozarks Legacy to get in touch with an experienced estate planning attorney. Our staff has been helping families in Southwest Missouri, plan their estate and build their succession plans for over 50 combined years. Trust us to protect what matters most to you. Get your operation ready to be passed down to the next generation. Book a call now!