Do not risk your farm or ranch with poor estate planning.
You are a farmer or a rancher.
You carry on the rich legacy of many in Kansas.
The work you do on your farm or ranch provides food for people across the nation.
According to a recent High Plains Journal article titled “Don’t wait to secure the future of your farm or ranch,” estate planning is essential to continuing this legacy.
If you received your farm or ranch from your parents, you likely have considered leaving the land to your children.
Unfortunately, only 20 percent of farmers and ranchers have a plan in place for transitioning ownership.
If you want to ensure that the future of your farm or ranch is secure, you need to take the appropriate steps.
Because the process can take time and thought, you should begin as soon as possible.
What should you know about leaving your farm or ranch to your loved ones?
Transition planning is important.
Without a plan in place, many businesses disappear.
Planning for the transfer of your farm or ranch to the next generation is not impossible.
Many men and women have faced the challenges of minimizing taxes, keeping the business running, and providing for non-involved loved ones outside of the family business.
Working with an experienced estate planning attorney can help you achieve your goals.
To begin, the estate planning attorney will help you frame your goals.
You also should talk with your heirs about their vision for the future of the farm or ranch.
Your conversation should also address the current division of labor and how responsibilities should be divided in the future.
After you have had the conversation with your family, you need to make concrete choices about distributing assets and transferring ownership.
To accomplish this, you need an estate plan for financial considerations like taxes and asset management, as well as a succession plan for the leadership of the farm or ranch.
Once the estate planning attorney has created your plan, you will need to implement it.
What might you need to do?
You may want to divide who owns the land and who runs the farm or ranch.
If certain owners understand farming or ranching more others, you may choose to give voting rights to some and not to others.
You have the option to have voting ownership overseen by a trust.
You also may want non-voting ownership in a trust to minimize estate taxes.
You will need to evaluate how you want to transfer the land.
Popular options include selling the property, creating stock options, or gifting the land.
Take action now.
Failing to prioritize estate planning for your farm or ranch could leave your loved ones without the legacy of your land and business.
Reference: High Plains Journal (Aug. 14, 2020) “Don’t wait to secure the future of your farm or ranch”
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