My last few columns have been focused on life insurance and just how invaluable it can be as a financial tool to properly fund a well-rounded and complete estate plan. Specifically survivorship life insurance, as it by far provides the lowest cost means of guaranteeing the liquidity needed to successfully settle an estate. Most importantly, the tax-free proceeds arrive exactly when most needed. And, in the process, satisfying the needs of all family members. Not just in the form of dollars, but in the resulting benefit of long-term family harmony. This is the goal that all the families that I work with strive to achieve and should always be the foremost objective of any well-thought-out estate plan.

We are looking to pass down a considerable amount of value in the form of farm assets and to keep those who are directly involved with the farm … on the farm. There must be an equitable solution, and there certainly can be. Please note, I did not say equal. Of course, you love all your children equally. Whether they are near or far and for better or worse. That’s the essence of our wholesome Midwest values. Assets, acres and dollars do not equate well to how much we care about each other. They are simply a measure of efforts, advances and opportunities provided. Each and every family has its own unique dynamics, and these need to be addressed as part of a well-drafted plan that takes all family members concerns into consideration.

Those who have worked the farm for years have played a major role in not only keeping it going, but also in improving and expanding the operation. And, therefore its overall value. This needs to be accounted for. If you are like nearly everyone who works the land, the vast majority of your assets are tied up in non-liquid farm assets. This is not to say we need to pass the entire farm down to the farming children and forego the non-farming kids. A reasonable amount needs to be determined for them as well. There are no hard and fast rules regarding this nor is there a simple formula to apply. This varies from family to family. There are many variables to be considered. Such as how much support each child has received for various reasons and endeavors. Might be in the form of educational expenses, home purchases, business start-up costs, etc. The list is nearly endless, but I believe you get the point.

It is absolutely imperative to have good advisors to help your sort through it all. Only through proper questions do we get all pertinent information needed to evaluate all the subtleties of the family and gain proper perspective. Once this has been successfully completed, we can then concentrate on weighing all of the financial considerations. Therefore, taking a complete big picture view of the family as it relates to the farm operation and what it will take to ensure the continued success of both for generations to come. Providing your family with piece of mind and you with the satisfaction of a well-deserved legacy.

In the next few columns I will provide you with some case studies to consider. Showing various options for funding through survivorship life insurance, borrowing and if you were to have the cash flow and discipline to start saving for these contingencies today. I will also show you the high cost of waiting by running the numbers at different ages and health conditions.

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

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