In the past, minimizing the estate tax was a prime concern for farmers and ranchers when considering their estate plans. Now that tax laws have changed, focus has been redirected towards planning a transition between the generations.
Many farmers and ranchers want to see their lifelong work passed onto their children and grandchildren, yet, don’t want to give up control of the enterprise during their lifetime.
Others realize that their children and grandchildren do not possess the interest, ability, or skills to successfully take over and run the family business.
Just as every farm and ranch is different and unique, so is every family situation. There are many details that should be taken into account during the estate planning process for farmers and ranchers.
Just a few things to consider:
- Do some heirs want to stay involved in the business, yet others have left or are not interested?
- What type of business entity is in existence? Does the operating agreement direct how financing, control, and management will be transitioned to your heirs or shareholders?
- Do you have family members or in-laws that you need to protect assets from? What about special needs children or grandchildren, or family members with addictions or money problems?
- How will your own retirement and healthcare situation be affected by the plans currently in place? Who will make decisions on your behalf, if you are not able to do so?
Don’t expect your estate plan to be completed during one consult with an attorney. (If this happens – get a second opinion!) This is a process that takes time and very careful consideration. Basic trust and will ‘forms’ will not adequately address the business nature of agriculture or many of the other considerations listed above.