Every farmer should have these five signed and notarized documents: 1) Will, 2) Advance Health Care Directives, 3) Durable Power of Attorney to Make Health Care Decisions, 4) Durable Power of Attorney to Make Business Decisions, and a 5) Letter of Instruction.
These are the minimum documents every farmer—actually every adult—should have in place to assist family members, other loved ones, business associates, and others who might become involved in case you become disabled or die.
A recent estimate indicates 55 percent of the U.S. population will die without a will (Harris Interactive for Martindale-Hubbell, 2007). An even greater proportion does not have advance health care directives.
Increasingly, farm and ranch families approach me to request assistance with succession planning issues. The issues usually involve sticky relationships with family members and specific desires about how the elders want their land to be divided and farmed by their successors.
Here are a few words about each document. The will is familiar to most people. It says who inherits your property – both the assets and debts, as well as who you designate as the executor to carry out these actions, and one or more alternates.
For practical purposes, the will is your estate plan. It might involve creation of a trust to provide income to your spouse or partners after you die. It indicates what happens to the property after the last person covered by the trust dies. Your will eliminates many of the disputes that might arise among your successors, making your passing and their lives easier.
Although there are free kits available online, I advise farm people to consult an attorney to help devise the will and any supporting legal documents such as a trust. Be sure to understand how property ownership is specified in land deeds and tax implications.
Advance health care directives indicate the medical procedures you desire to maintain your life, if a health crisis emerges. Advance directives usually involve a living will and to whom you give durable power of attorney (POA) to make health care decisions when you are incapable of making these choices.
The living will specifies medical procedures you want or would not want to keep you alive. Often the treating hospital and physicians are not aware of a patient’s living will and follow their oath—and legal requirement– to maintain life as long as possible, even if that is not what you wanted.
Forms to construct a living will and POAs to make healthcare or business decisions are available online, as well as from many hospitals, clinics and attorney offices. Be sure to use the form for your state or province. It is best to give a notarized copy of the living will and durable power of attorney form to your physician(s) and to the institutions that are likely to provide you care. The POA should specify who has primary responsibility to make these decisions and at least one alternate.
I consulted the Gundersen Lutheran Hospital in La Crosse, Wisconsin for some of the information in this article. It has a helpful website (www.gundluth.org/AdvanceCare) with information about advance care planning. I recommend you sit down with your physician(s), and perhaps the persons to whom you give POA to make healthcare decisions, to review the end-of-life procedures you wish to implement.
The durable power of attorney to make business decisions document indicates who you want to make business transactions, pay your taxes and carry out other business activities when you are unable to do these things, and names at least one alternate. It helps to give these persons the right to make bank deposits and payments, to sign checks, and to have access to your safe deposit box in case you become incapacitated. The designees will need to sign necessary forms at your bank.
It is advisable to write a letter of instruction to accompany your will. Give a copy to the executor of your will. This document should indicate the following, if relevant to your situation:
Where important documents such as insurance policies, saving accounts, loans, leases, POA s and any other significant information are kept,
Instructions for the care of dependents such as minor children, and
Instructions indicating how you want your land to be farmed.
The letter of instruction is not legally binding but in many ways is the most important of the five critical documents listed because it helps your survivors know your wishes.
Besides these, other recommended documents you might want to consider are the following: a funeral plan, an organ donor card, a wallet-sized card indicating who has health care decision POA and where to reach these persons.
The documents described in this article give psychological comfort to you and your successors, as well as save legal costs, and in many cases, medical costs.
By Mike Rosmann, Ph.D.