Dear Michael: We have a good family farm operation. Our son works with us and owns quite a bit of land on his own–although we still own the central properties. He should be able to buy out his siblings share. We've also put quite a bit aside into the stock market over the years to go to our non-farming children, of which we have two. This sum has grown to a sizable amount–nothing like the farm–but still a good amount. We are coming into our seventies now and wonder if the stock market is a good investment for us–and ultimately for our children? Is this a good place to get a good return? – In The Market

Dear In The Market: I can honestly answer you one thing about the stock market and it's returns in the years to come: No one knows. That includes any expert you want to bring up, from Warren Buffet to Jimmy Buffet.

Investment portfolios, over the years, were started by people who were concerned about their retirement income. It has been a good place to put money aside and ride out the ups and downs. The rate of return–for most people with good brokers–has been higher than CD rates, which isn't saying too much lately.

I think what happens to many people as they go through their phases in life is they forget to change their investment thinking from "How much am I going to build up one day?” to "How do I protect this and all of my other assets?”

Everyone should go through a checklist to make certain they are where they should be in their life at any given time.

For example, when I'm young and have debt, I need to check off the "If I die, how will this debt be paid off for my family?”

When you reach sixties and seventies, the questions you ask yourself have to shift from building an estate to protecting it. You would have an entirely different checklist to go through.

You might ask yourself, "Does my farm produce enough income for me and my spouse so that we needn't worry about the future?” If it can't, you might think about the fact your lifespan is shortening each day and it might be wise to sell some of your land to your farming son to raise your level of income.

If you have sufficient income to meet your lifestyle, great. Check.

The next item on your checklist might be "If we die today or in the future, are there sufficient assets to provide the non-farming children an equitable inheritance?” If not, you and your son need to have a long conversation about what you expect from him to pay his siblings to equal out what you would consider an equitable settlement. Then, if you want to avoid future problems, bring the other children in on the conversation and tell them what you have decided. This keeps Junior off the hook later when you die.

If you've got this handled, great. Check.

Last, but not least, is having the funds you have now. You're worried if will be enough or continue to grow for your non-farming children. If I were you, I would be more worried if they are still going to be there when you die.

With life spans ever increasing, the percentage of people requiring some type of care–home care, assisted care, facility care–before their death is now up to seventy percent of all people. Many people say, "Well, I bought nursing home insurance years ago, so I'm good,” but what they bought is $100/day coverage when average costs are now at $275.00 per day and growing at 8%. This is like insuring your home for eighty thousand when it will take two hundred thousand to rebuild it–only your home doesn't have a seventy percent chance of burning down, but you do.

You should now start positioning your money if you have sufficient income, got the farm transition handled with your son and other children, etc., for maximum protection from getting old and the seventy percent chance of needing care. What good is a seven percent return on money that went to pay for long-term care?

As we go through the aging phases of life, we have to address the problems each age brings about. Too many people get stuck in the accumulation phase for far too long for their age and end up losing a lot more than just their savings and investments.

Michael Baron is the owner of Great Plains Diversified Services, Inc. and is a regular contributor to the "Farm And Livestock Directory". Involved in farm estate planning for more than thirty years, Michael Baron is well-versed in farm income taxation, estate taxation, retirement planning, transition planning, oil and gas estate issues, and all other issues facing the family farm, including family dynamics.  Presented in a comprehensive, down-to-earth 'question and answer" format, the topics addressed in this column talk about the many aspects of estate planning – and how to 'Keep the Family Farm in the Family'.   Contact Michael Baron at [email protected].