Farmers without children face different challenges when making estate plans compared to farmers who have children that will inherit the business.
A farmer with children usually focuses on transferring the farm and assets to their children and grandchildren in a manner that will preserve the farm.
However, I find that farmers who do not have children primarily focus on how their plan will take care of them and their spouse in retirement. They want to determine who will care for them in the event of incapacity, what options are for long-term care assistance, and how their remaining assets could be used by extended family, friends and the community at large.
Some key issues I address include:
Choosing a successor trustee, personal representative, attorney in fact for power of attorney and health care agent. This should be a person or a panel of people that the farmer trusts very well. These people should generally be younger than the person making the plan and they should be willing to help when needed.
I suggest discussing the role with the persons chosen so they understand the responsibilities. If the farmer does not feel they have someone they can entrust with these responsibilities, they have the option of choosing a professional fiduciary.
I suggest interviewing and meeting with a number of professional trustees and fiduciaries to be sure you are finding the best fit for your needs.
Providing detailed instructions of their health care wishes. A farmer without children or close family may not have close relatives or friends who would know their personal preferences for medical and personal care. Without this personal knowledge, the agent is going to be looking for instructions so they can best help you and serve your wishes.
Choosing how farm assets should be managed and distributed upon death. This can be a difficult task. I have met with farmers who take many years to determine exactly how they want their farm to be distributed upon their death. Some will decide to distribute to extended family members.
Some create trusts to hold the farm land for multiple generations to provide a source of income and recreation for close friends and their descendants. Some create charitable trusts and organizations for the assets and property to benefit. Some transfer the land to young farmer programs or other organizations that promote farming.
There are many options to consider and there are few restrictions on what can be done. Starting early and thinking through the options is best.
Balzarini is an attorney at law with Miller Legal Strategic Planning Centers, P.A. Contact him with questions and comments at firstname.lastname@example.org.