For many farmers, one of their biggest goals is to pass the family farm to their children. Others, who may not have family members interested in inheriting the family farm, look for alternative routes, like passing it on to a neighbor or employee.
Regardless of the recipient, transitioning ownership of your farm requires careful planning, the right protection, and a trusted partner.
Have a game plan
The USDA reports 70% of U.S. farmland will likely change hands during the next two decades. Even more surprising, it’s estimated that half of farm families operate without an estate plan in place.
Estate plans are critical to transition ownership of your farm, but they can seem overwhelming.
Here are three essential ingredients to help you get started:
If you don’t have a written will, the state will decide what happens to your assets. Since you probably prefer to have a say in what happens to your belongings, make sure you have a will and review it every five years or following major life events, like remarriage or increase in assets.
2. Durable Power of Attorney
This document designates a person to make financial decisions for you, should you no longer be able to make decisions for yourself. You can also include a back-up Power of Attorney in case your first choice is unable to perform the role.
3. Financial Go-Bag
Regardless of the size of your estate, designate a spot to organize their financial information. Besides basic items, like birthdates, Social Security or military information, include tax records, banking, investment, insurance, business and real estate information, too. Don’t forget to include copies of the documents mentioned earlier (items #1-2) and keep everything in a secure location that family members or trusted individuals can easily find.
Take the next step
It’s never too early to begin planning for your farm’s future, but it can be too late.
That’s why our agribusiness team partnered with the Illinois Farm Bureau to host a farm legacy seminar near you in February 2020. At these free seminars, you’ll enjoy dinner while Dr. Ron Hanson discusses planning for your family farm’s future.
COUNTRY Financial® is not affiliated with and does not endorse or recommend the services of third party speakers or advisors. The products and services discussed in this informational presentation may not all be offered by the COUNTRY Financial® family of affiliated companies or their representatives. Product availability varies by state. COUNTRY Financial® and our representatives cannot give tax or legal advice. Any information we provide reflects our understanding of current tax laws. Tax laws are subject to change and reinterpretation. We recommend you consult legal and tax counsel of your choice before making any decisions regarding your personal planning needs. Wills and Trusts are important legal documents. You are urged to consult an attorney for more information.