Carolyn Thompson, a Sioux Falls, S.D., attorney, says the top four excuses she hears from farmers for putting off estate planning are:
I don't want to die. "Talking about babies won't make you pregnant, and talking about death won't make you dead," says Thompson, who is an estate planning specialist.. "Your death will come whether or not you have talked about it (or planned for it). You cannot keep death from happening, but you can determine whether, after it happens, your loved ones have a plan to follow (based on your goals), or whether the state will decide who will receive your assets and how (based on intestacy laws)."
I don't have time. "Farmers are busy, no doubt about that," Thompson says. "But I bet ….you can find an hour to prepare for an estate planning meeting." You need some basic things – the name of your kids and your spouse, a personal financial statement and a plat book showing the land that you own. "You have now gathered the majority of the information you need for a meeting with a qualified estate planning attorney," she says.
My estate will never be as large as the tax exemption. "The current federal estate tax exemption allows a person to transfer $5,250,000 either during life or at death," Thompson says. But with the price of land and machinery that level can be reached quickly by many commercial sized farms. Smaller estates can cause problems, too. "How does Dad divide $1 million worth of equipment among three children? Can brother afford to purchase his sisters out? Is there any favorable purchase option for the sweat equity he has contributed to the farm?" Thompson asks.
I don't know what would be fair to my heirs. "Just as a doctor does not expect you to come to an appointment with a diagnosis, estate planning attorneys do not expect you to have your entire estate plan mapped out, Thompson says. A qualified estate planning attorney will be capable of helping you sort through issues. "Don't let the lack of a "fair" solution in your head be another excuse for inaction," Thompson says.
Read more in the December 2013 issue of the Dakota Farmer, "Excuses, excuses, excuses" page 72. You can also find it online.