Farm Progress

Country Counsel: For wills and trusts, make sure that your plan still works.

Robert Moore, Co-owner

December 19, 2016

3 Min Read
CHANGES: Be sure to update your insurance agent with any new activities you have taken on.imoooun/iStock/Thinkstock

With the new year upon us, now is a good time to catch up on various legal matters. The following are some suggestions for making sure all your legal work is in good order.

Corporation minutes. If you have a corporation, you are required by Ohio law to have an annual shareholder meeting and minutes to memorialize the meeting. The purpose of the shareholder meeting is to elect directors for the corporation and conduct any other necessary business. The minutes do not need to be anything overly complicated, they only need to identify which directors were elected and any other matters brought before the shareholders for consideration. Good minutes can also be useful as a historical record as to what decisions were made and the reasons such actions were taken.

Estate planning documents. Although estate planning documents do not usually need updating every year, it is still a good idea to review them to make sure they still reflect your intentions. For wills and trusts, make sure that your plan still works. Did something occur in the last year that will affect your estate plan? For example, did a child come back to (or leave) the farming operation? Did your assets significantly increase or decrease in value? Did issues arise within your family that affects your asset distribution? Updating wills and trusts are usually relatively easy to do.

Other documents to review are your powers of attorney. Everyone should have a general (financial) power of attorney and a health care power of attorney. These documents allow another person to take care of your financial affairs and make your health care decisions if you cannot. Make sure your power of attorneys are still willing to serve in the capacity, and their contact information is current. Also, make sure that someone knows where your estate planning documents are located. Will, trusts and power of attorneys do not do much good if no one can find them.

Insurance. Related to legal issues is your liability insurance policy. A phone call with your insurance agent once a year is usually time well spent. Be sure to update your agent with any new activities you have taken on. Examples might include custom harvesting, spraying or hauling; farm markets and agritourism; or direct sales to customers. What may seem like an insignificant activity like opening a farm market can have major impacts on your liability exposure and insurance. It is always better to be sure that everything you are doing is covered under your policy.

Leases. Leases are some other important documents that should be reviewed regularly. It is particularly important to remember that leases for more than a three-year term must be notarized to be enforceable. Long-term leases should also be recorded to make sure the lease remains in effect if the land is sold or transferred. Also, review any renewal terms. Some leases automatically terminate at the end of the term, but some leases automatically renew at the end of the term unless notice is provided. Be sure you are aware of the notification deadlines. Another good practice is to make sure the proper landowner is identified on the lease. Sometimes a landowner will sign a lease in their own name when the land is actually in their trust or a business entity. This type of scenario could potentially cause the lease to be defective. A good way to check on this is to use the county auditor’s website to verify the owner of land being farmed.

Moore is an attorney with Wright & Moore Law Co. LPF. Email him at [email protected] or call 740-990-0750.

 

 

 

About the Author(s)

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like