Dear Michael: What do you think are the most important parts of setting up a good estate plan? Our kids keep changing things in their lives with new spouses and new jobs. We keep talking about it, but my husband I never seem to agree on what we should do – so we do nothing.
I think everyone can agree that it’s easy to procrastinate when there are unknowns to your questions.
The best way I know how to eliminate ‘unknowns’ is to educate yourself and, simply by asking the question you did, it shows you want to know. So, hooray for you! You’ve moved off of the starting blocks. Now that you’ve got some momentum, keep going until you’ve resolved all of your questions and feel comfortable putting things down on paper and in your year-to-year farm plan.
You see, in my mind, estate planning is about what you do with your property while you are alive and what happens if you die too soon before you accomplish everything you wanted to prior to your death. An estate plan should have a transitional element in it today, tomorrow, next year and even past your death.
For example, if you have a farming child or children, you should have all sat down at one time or another and talked about what happens when you and your husband decide to retire. This is a transition period all in itself.
Sometimes, talking about death and what happens then is very stressful for a family, depending on how they are wired. But talking about retirement can actually be fun and enjoyable. If you have a farming child, they’ve probably been wondering when you were going to have this chat in any case.
You don’t have to have a set retirement date in mind – just saying, “When you do, here’s what you’d like to see.”
As you have this chat with your spouse and your children, keep in the back of your mind this is what you’d like to see if you live long enough to see it, but keep a mental note of what things would happen if you weren’t here to see it.
For example, if you tell your son you’d sell him the machinery for half of the listed price, keep in mind if you’re not here to sell it to him, then you better have a piece of paper that says he can buy it at that price. That piece of paper is called a will. Remember, if you’re not here and there’s no will, he’s not going to be paying half price to his siblings.
If you would sell him the land on a contract for deed long enough to cover your lifespan when you retire, then perhaps somewhere on your piece of paper called the will it should state he can buy this land – less his share, of course. Maybe you would sell it to him for a lesser price to make things work. Put that down on your piece of paper.
All in all, we take all of your intentions for your own future now regarding how you want to see your farm while you’re in it, how you’d like to see things transition once you retire, what parts of your estate would be changed to income sources, and what your retirement needs will be.
Once you’ve spent some time thinking about all of these happy thoughts – ah, retirement – then it’s so much easier to fill in the blanks for your wills and estate plan. If you have ideas about how things would go the day you retire (if farmers and ranchers ever truly do), then we can just transition some of these ideas to what you need in your estate plan.
So, in answer to your question, Procrastinator, what would you like to see while you are alive – and how do you come up with a plan that keeps things rolling right along if you and your husband are not here.
This is the most important thing!