We are long-time readers and appreciate your opinions on farm and ranch estate planning. It seems like every time we set down and get serious about putting together a plan or putting things down in writing, for example, a will, something appears about ready to change or has changed and we haven't had time to see the outcome of these changes. For example, our son just moved back home, but we don't know if farming is the life for him. So, we just sit on our hands or put it off until another time. Perhaps this isn't the right thing to do, but what else can we do?
– signed, Procrastinating to a Clearer Future
I looked on Google about famous quotes on 'procrastination' to find one that was appropriate and, to my amazement, there are millions of them online. So, although no one seems to find time in their days to finish their work, or planning, in this case, they seem to have the time to think about it. I did find the one, a Scottish Proverb: “What may be done at any time will be done at no time.”
If there was ever a perfect year for procrastination – and reasons for procrastination – this year would qualify. Rains came early in the planting season and lasted until late June. Then, it started raining at harvest time and every day of rain is two days of waiting for it to dry.
On the other hand, we've had 260 traffic fatalities in North Dakota in the past eight months, which is about a two hundred percent increase from six years ago.
Reading the paper lately makes one wonder about all the other weird and, oftentimes not so wonderful stuff occurring in our state since the boom. If I were driving north of Dickinson or west of Minot, it may be appropriate to wear a helmet – while you're in your car.
When I drive around Bismarck these days, I notice most drivers are doing everything but actually driving the car these days. Close calls used to happen to me once or twice a year – now it's more like once a week.
In any case, back to your question, planning for any big event seldom has If a perfect day to start. If you waited for the perfect person and situation to get married, you likely would never have gotten married. If you had waited for the perfect time to have children, financially, emotionally, etc. you likely wouldn't have any children. If you waited for the perfect time to acquire the first piece, or second piece or whatever piece of property you're working on now, you never would have started in farming or ranching.
One of the main reasons people put things off in estate planning is waiting for a clearer picture of the future. You likely didn't do this when you got married, or had children, or bought into the family farm, or added on to it, etc. but now that it's time to actually sit down and plan for it, you're unsure what to do.
The perfect estate plan covers all the 'what ifs' of estate planning. What if' your spouse should die? What things should they be doing? The answers are quite different whether it's the farming husband who dies and the non-farming wife is left? This is one of the first questions I ask people and about ninety percent of these couples have never had this conversation and you'd be amazed at how differently they think about what they 'guess' should happen. You'd swear these are two strangers who just met on the street when you listen to the answers.
Your estate plan should also include, "What if one of the children should decide to farm?" Some families have candidates – others do not – some have too many.
Answers to these should be worded very carefully. For example, "If my farming child has taken over the family farm, and is 'actively participating' in farming for a minimum period of at least five years, then s/he can rent or buy the land from their siblings at such and such a rate or valuation. The terms may be (contract for deed, cash within six months, etc.)."
In other words, if we focus on the family farm as a business and have the proper verbiage to meet all and any considerations for the family farm to continue, we've just removed a big reason for you not to complete your farm estate planning. We maybe don't know who or when or how, but we can put the verbiage in their so they can survive.
One thing is certain, if you put nothing in your plan about how the family farm will survive, you fall under the old saying, "People don't plan to fail, they just fail to plan." And fail is what your family farm will do.
It's a simple question – if you could plan for a successful future or you could choose not to plan and guarantee failure, which would you choose?