Many farm families believe farm business transition and personal estate planning is not for people like them, or that it's too time-consuming, expensive and complicated.
Farm families do, in fact, need to plan ahead to protect their farm business.
University of Minnesota Extension recently surveyed farm and ranch families in Minnesota, North Dakota, Iowa and Wisconsin. The 3,605 family members representing 1,706 farm and ranch businesses in the survey had attended an Extension business transition and personal estate planning workshop.
Almost 85 percent of respondents did not have a farm or ranch business transition plan. Almost 70 percent of the respondents did not have a personal estate plan. That means there is no orderly plan in place for the transition of their business and personal assets to the next generation.
Research shows that about one percent of all estates in the U.S. pay any estate tax. Many of those estates represent the very wealthy; however, another group that ends up paying estate taxes is the folks who do no planning or who do poor planning.
Although tax issues are a big incentive for many to begin planning for the future, there are other reasons why farm families need to plan for protecting their business and personal assets.
One person wrote to me to tell me his family was prompted to put together a farm business transition plan and succession plan after attending an Extension workshop. Six months after getting the plans in place, his brother was killed in a farm accident. His brother was the majority owner of the farm. Having a plan in place saved his family business from potential chaos. Such an event can change your business, your personal life and your family's future.
Begin planning now in order to protect your farm legacy. Find a competent professional team and start planning today to protect your farm business. Visit Extension's Farm Transfer and Estate Planning program at www.extension.umn.edu/go/1056 for more information.