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Position your farm for success

MCCAIG/Getty Images Highway sign reads 'Plan Ahead'
LOOKING FORWARD: Investing time and energy into your estate plan should be as important as the work you do on your annual crop strategy. And realizing it takes time to build a solid succession plan is important.
Invest in estate planning as much as you would your crop. Significant death tax increases have been proposed.

As you move into another farming season, think back about all the planning and organization that went into what you hope to be another successful year. That planning and organization was critical, and it is always one of the largest factors for creating a successful outcome.

When your focus shifts to your estate planning, and effectively mitigating future taxation, you should recognize that the importance of planning and organization is no different.

Sadly, many farmers, ranchers and business owners tend to neglect their estate planning until their friends, financial adviser, CPA, or all of them tell them that Congress has again changed the game and they need to take action quickly to capture critical planning opportunities.

Unfortunately for them, the effective date of new legislation is set by Congress. Once that date passes, previously available planning options evaporate, and you are stuck with the new rules. In farming, if you're going to be successful, you can't undertake and perform all the tasks necessary for a successful outcome in one week. It is a systematic process that includes many steps, each of which requires preparation, organization and planning.

Estate planning is no different. It's not like buying a part for the tractor. There are a number of steps needed to accomplish an effective outcome. When undertaking advanced tax planning strategies, these steps can take months — or longer if no foundational plan is in place to build those strategies.

Also, you are likely not the only one who procrastinated. Finding an appropriate professional who has the time and resources to help you at the last minute will be an additional challenge.

Assemble succession team

Having a relationship with a team of professionals such as an estate planning attorney, financial adviser and CPA who are collaborate for your benefit is key to successful planning. It takes time for them to understand you, your family, your operation, and most importantly, your key goals and objectives. Understanding these things is critical to adapting and implementing the most appropriate tax mitigation strategies that work best for you and your family, and in conjunction with those goals and objectives.

If you're simply buying a tax strategy, you may find later that the strategy, purchased and implemented at the last minute, did not fit your ultimate goals and objectives. Sometimes it can directly conflict with them.

Imagine not putting a thought into what you're going to plant, where you're going to plant it, and how you're going to fertilize it, harvest it and sell it until the season begins each year. You would begin the season with no seed, no fuel, no fertilizer and no plan. You would agree that this is not a recipe for success. The same wisdom applies to your estate plan. Don't put it together with bailing wire and duct tape at the last minute if you want a successful result.

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, estateplansthatwork.com.

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