by Dennis Foster
Special to the Farm Forum
As of late, I have been touching on the reasons — more accurately excuses — used to put off or even totally ignore estate planning needs. I am sure that most, if not all, of your parents had taught you that a problem that is avoided does not go away. Rather, the underlying issue just compounds. As this relates to family matters, namely, the family farm, it only gets worse. In fact, far worse.
One of the most common subjects used to dodge the responsibility of estate planning is the government. We can justly blame many of the problems in our country on the federal government. The failure to take care of family matters is not one of them. It is simply failure. Plain and simple. The continually intensifying bickering, posturing, and in the end accomplishing little more than a stream of childish tweets seems to be an increasingly common theme in Washington, D.C. Interestingly enough, your family will end up much the same should you choose not to put your affairs in order.
Do you really think that any action our government takes is going to make transitioning full ownership of your farm to the next generation any easier? I, for one, think this is highly unlikely.
Estate taxes are the first thing that comes to mind. We are in a fairly acceptable position today as in round numbers, due to portability of the Unified Credit, a husband and wife can pass down in the neighborhood of $11,000,000. That is what we know as of this writing. Who knows what it will be in the future? Tax laws can and do change direction as quickly as the winds sweeping across our prairie landscape. In this case, political winds. There is talk of complete repeal of the estate tax. Is this likely to happen? Once again, who knows. I am skeptical as passing down amounts of wealth exceeding today’s exemption does not garner much interest, let alone sympathy, with the urban representatives. Which is by far most of them, particularly on the house side. One thing that I can confidently predict is that there will be continual adjustment to the tax codes. Use your own best judgement as to whether future changes will be advantageous to your family.
So, how do you go about planning for what amounts to a moving target? My suggestion is to plan for what we know today. Thoughtfully drafted legal documents and soundly funded planning will build in a degree of flexibility. Should future refinements be called for due to not only shifting tax structure but also varying family dynamics, it can be easily worked into your original base planning. At the very least you have carried out having your wishes down in writing. The inner workings can always be adjusted as needed.
By using what is unknown and will remain unknown right up to the very day that you pass as an excuse to fail to take action is quite frankly, foolish. Unless you have a fully functional crystal ball and can predict the future, you had best act now. What you have accomplished by doing nothing, is exactly that, nothing. The phrase “nothing ventured, nothing gained” could not hold more meaning than in this context.
For your own peace of mind, do yourself and your family a favor and pick up the phone to call someone to help you get the process started. That is the largest hurdle to clear. With competent advisors, the rest will fall into place much more easily than you may have imagined.
Dennis Foster has been helping families with financial and estate planning needs for 25 years. He welcomes comments and questions and can be reached at 605-887-7069 or [email protected]