I hope you got a chance to read parts 1 through 3 of this series. There’s a lot of information involved in an estate plan and this is a good place to start. Below you’ll find part four of our list of questions that can help you decide if the time is right for a farm business transition.
16. Are the parents willing to eventually move to town or to a residence off the farm to allow the new manager to be nearer the center of farm operations?
17. Can and will both parties put together a tax plan which will be acceptable to everyone as they transfer assets?
18. Are the parents insurable and will they permit the younger generation to carry life insurance on them for financial protection in case of premature death?
19. Are all parties willing to provide protection from premature pay out to off-farm heirs by establishing purchase options with installment terms for sale of assets in their will or trust?
20. Are all parties willing to pledge that they will not try to control any aspect of the other parties’ business and personal lives?
If you can answer "Yes" to nearly all of these questions, you should look for my next blog and a few more questions. If you answered "No" to any question, you may wish to evaluate the situation before you proceed.
In some cases, you will need the help of trusted advisors to answer these questions. It's another reminder of the value of fee-only, fiduciary financial planning advice during this process.
If this article has you thinking about your own circumstances, contact my office at firstname.lastname@example.org.
The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.