Transferring your farm or ranch to the next generation involves communication, as well as complex legal and economic decisions. This creates a number of challenges for a typical family enterprise. This is why in many cases, planning for the successful transfer of the farm or ranch does not occur. Many families are not prepared for the potential conflict due to the differences in goals, values, and equity. Inheritance decisions can have powerful emotional and economic consequences.
On the other hand a lack of planning means that state and federal laws could decide what happens to your real and personal property upon your death. Someone is going to inherit these items. You worked hard to accumulate your family wealth; therefore it should be up to you to decide how it is distributed.
Communication is the logical first step, but in many cases also the most difficult. Why? Many don’t want to face their own mortality. Plus the older generation is not nor never will be ready to retire. Adult children are hesitant to initiate these discussions as they do not want to appear greedy or that they are pushing their parents out to pasture.
How can one initiate these conversations? Mention or share articles you have read. Discuss workshops or seminars that you have attended. Talk around the dinner table may turn to a community tragedy in which a family failed to plan. This could assist in initiating action by the family. However, in some cases, family members may never be ready, but you must keep trying.
Once the decision is made to conduct generational transfer planning you must enlist a team of professionals to assist. There are a number of technical and complex factors that must be considered. It is imperative to call in the experts to help. Advisors such as attorneys, certified public accountants, financial advisers, and insurance professionals can offer valuable support.
A good estate plan can offer financial security for you and your family. That security is important not only today but in the future. A properly prepared plan can help to protect your family from bitter quarrels and save thousands in taxes.
You should consider reviewing your estate plan every 3 to 5 years. It should also be reviewed if tax laws change and/or your personal or financial situation changes.
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