By Michael A. Dolan

As far back as biblical times, it was conventional wisdom that when you build something, you should begin by laying a solid foundation.

Luke 6:48 says, “It’s like a person building a house who digs deep and lays the foundation on solid rock. When the floodwaters rise and break against that house, it stands firm because it is well-built. But anyone who hears and does not obey is like a person who builds a house right on the ground, without a foundation. When the floods sweep down against that house, it will collapse into a heap of ruins.”

As you undertake designing your estate plan to protect your farm or ranch, you should keep that wisdom in mind. People tend to procrastinate when it comes to estate planning. It’s not a subject that people are excited to face or talk about.

As a result, action usually takes place when a motivating event occurs. These can include having to deal with someone else’s estate, bad news from your doctor or significant changes in tax legislation.

You’re now in a position where your desire to fix the problem overcomes the procrastination built into our human nature. When tax changes are the motivating factor, we look for a direct solution to protect against the newly recognized tax danger. Solutions are now readily available, because the legal and tax professionals are actively marketing strategies to address that specific issue. Unfortunately, the strategies are usually designed to only address that single problem.

Goals and focus

Your estate plan needs to be designed around your family, your goals and your situation. When you design your estate plan starting with tax strategies, it is like building a house right on the ground — without a foundation.

If you want your estate plan to stand firm, you need to build it on a solid foundation. A solid foundation in estate planning is building a core plan designed to accomplish your goals to protect and benefit your family.

This is the foundation that will then allow you to choose the most appropriate tax strategy to meet your goals while standing atop that foundation. I regularly see estate plans where professionals have sold the family the latest tax planning strategy, only to discover later that the strategy was in direct conflict with one or more of the core goals they were hoping to accomplish for their family. They let the tax tail wag the dog.

Reducing income and death taxation are important aspects of estate planning; but when you really think about it, the only reason you don’t want to give the government money is that you would prefer it stay with your family. If the tax planning strategy contradicts your important goals for your family, you haven’t really gained anything.

Most of the time you can accomplish both. The way to assure you do is to always start with a foundational plan focused on the family goals first. Then, choose the appropriate tax strategy that fits within those goals.

Dolan, an attorney, helps farm and ranch families achieve comprehensive estate, succession and legacy planning objectives. He is the principal of Dolan & Associates PC in Brighton and Westminster, Colo. Learn more on his website, estateplansthatwork.com.

Scripture quotation taken from the Holy Bible, New Living Translation, copyright © 1996, 2004, 2015 by Tyndale House Foundation. Used by permission of Tyndale House Publishers Inc., Carol Stream, Ill. All rights reserved.