Farmers are used to planning ahead.
You are a farmer.
You are accustomed to planning ahead.
You know you need to prepare for harvest before you begin planting.
Unfortunately, many farmers neglect planning when it comes to their estates.
According to a recent Ag Web article titled “5 Estate Planning Mistakes You Don’t Want To Make,” many farmers believe estate planning is unnecessary due to the high federal estate tax exemption.
This high exemption has an end date, unless renewed or made permanent.
That current expiration date is December 31, 2025, when it will fall back down to $5.5 million for an individual and $11 million for a couple.
With a major election in 2020, this exemption could die even earlier.
Another issue is family.
With marriages, divorces, remarriages, and blended families, succession planning for your family business becomes essential.
Who will be a part of continuing your legacy and your work when you die?
You do not have to treat all your children the same.
You may have children you love the farm and will never leave.
You make have children who love city life and have their own dreams.
Talk with your children individually and together about your intentions.
Without communicating your plans and seeking their input, you could be unintentionally killing your own business.
When it comes to titling property, you cannot just leave it to be owned by your surviving spouse and your children together.
What if one of your children should get divorced?
The ex could have claims to a portion of the property.
Can you simply sell the farm when you retire?
Although you could do this, the income tax burden could be significant.
What if you just "copy" the estate plan your neighbor has in place?
Will this work?
Every family is different.
Every business is unique.
You need to work with an experienced estate planning attorney to ensure proper alignment of your estate plan and business success plan.
Reference: Ag Web (January 15, 2019) “5 Estate Planning Mistakes You Don’t Want To Make”