The brave families that have chosen agriculture as a vocation are familiar with uncertainty. Moisture, temperature, pests, invasive weeds, wildlife, and disease are all things that can have a major impact on the success or failure of your operation. Add on fuel and commodity price fluctuations, as well as regulatory changes, and you wonder how a farmer or rancher ever gets any sleep.
In addition, we have Washington and the statehouse to worry about. We can vote, and make our voices heard by communicating with our representatives. However, most legislation is being controlled by the voting power of large population centers that have little understanding of agriculture.
Planning and faith are two keys that can ease the stress. Planning ahead makes a huge difference in reducing the stress of those uncertain things in our future that we often cannot control. Faith allows us to persevere even when our plans don't turn out the way we hoped they would.
Saving for the lean years is a great example. Also, diversifying your crops, or herds, can also level out the difficulties of agricultural uncertainty.
As an estate planning attorney, I see many agricultural families failing to take the steps to maximize the available tools to reduce future uncertainty when it comes to tax planning. Currently available tools, if properly implemented, can reduce death tax uncertainty in the future. It can also help manage capital gains tax exposure. These techniques can provide flexibility and options to your future generations. Your parents may not have invested in these advantages to help reduce your uncertainty, but you have the opportunity to help reduce these uncertainties for your family.
The death and income tax environment WILL CHANGE in the future! Just like the weather! Taking action now to limit the impact to your operation and family in the future is basic wisdom. Planning to reduce or eliminate death taxes for multiple generations, or reducing potential capital gains impact if a sale of assets is necessary in the future, are just two examples. Some will invest in positioning themselves to reduce the future impact, some won't. Those that do will always have a better chance to survive the future uncertainty, and also have a better opportunity to prosper and succeed.
As we face a new year, with new challenges and uncertainty, I encourage you to plan like it all depends on you, and pray like it all depends on God. By doing so, you and your family may have struggles, but you or and your family will never lose.
Dolan, an attorney, helps farm and ranch families achieve comprehensive estate, succession, and legacy planning objectives. Dolan is the principal of Dolan & Associates, P.C. in Brighton and Westminster, Colo. Learn more on his website: www.EstatePlansThatWork.com.