Farm & Ranch Planning
Preserving Your Family Farms & Ranches
At Legacy Design Strategies, our attorneys have seen a rise in interest in a planning area that is dear to the hearts of many: preserving family farms and ranches. The founding member of our firm, Andrew C. Sigerson, is from Nebraska, and the firm has assisted hundreds of farm and ranch families throughout the Midwest.
Estate planning must be adapted to fit specific family situations, and we’ve found that keeping a farm or ranch in the family requires unique, targeted strategies. Because of the complex and unique nature of farm and ranch estates, one can’t follow the same simplistic approach that a family with only “cash investments” might use.
There are great reasons for preserving and passing on the family farms and ranches in communities like ours, along with unusual challenges. Farm and ranch life is unique, and carries certain values that those not familiar with it might not understand. But it’s also tough to give the farm or ranch to a child who will keep operating it, while treating the other children fairly.
Our unique approach to farm and ranch transfer planning is designed precisely to allow that to happen.
Keeping the Family Farm and Ranch in the Family
“We worked hard to pay for and build up the farm to what it’s worth today. We couldn’t have done it without the help of our son (or daughter). As we do our estate planning, how can we be fair to all of our children?”
So begins the conversation these days between farm and ranch owner(s) and professional advisors. While some may think of estate planning as merely estate tax planning, taxes are just one issue. The most difficult and important matters may have little to do with taxes. Creating and carrying out plans that will ensure fair—while not necessarily equal—treatment of your loved ones is such a matter.
Fairness Is Essential
Taking responsibility for this fairness issue is critical to the long-term health of your family and your legacy. Fail in this regard, and there might never again be a complete family reunion. Stick your head in the sand and you can count on the family farm or ranch becoming part of the holdings of the highest bidding neighbor. There is a big difference between treating everyone fairly and treating everyone equally.
We have to face the facts: our society has changed. Children used to stay in the area, marry neighbors, and continue the family farming and ranching traditions. Daughters became farm wives and sons became farmers or ranchers. Now families have at most one or two children still in the farming or ranching operation. The others have moved on and away to different careers. The child who is heavily invested—in time, energy and dedication—may very well depend on this farm or ranch for a livelihood. To some degree he or she has earned the “right” to keep it, considering that the others moved on to often more lucrative careers and less risky futures.
Despite the changes in society, however, our core values remain unchanged. We want to treat our children fairly. Farming and ranching is “in our blood” and we want to see it—this farm or ranch —go on. We want to know someone in the next generation who shares our love of farming and ranching will carry on the tradition.
You Must Take Responsibility
The hopeful but naive person says, “I just can’t figure it out for them. My kids all get along, they’ll be fair with each other. They’ll divide the property agreeably.” Don’t do that to your family. The wonderful kids today may well become competitors tomorrow; easily persuaded that they are entitled to their full-value, equal share.
Take control of your estate plan. Focus on the results you want to see; let the attorney worry about what legal papers—wills, trusts, buy-sell agreements, partnerships, etc.—will be needed.
Where To Begin
If you commit yourself to a proactive planning process it is possible to achieve fair results that the family will understand and accept. In this extraordinarily complex arena you will need professional counsel.
It’s easy to find attorneys who say they “do estate planning”—but much harder to find one who knows farming and ranching and will help you develop and implement the solutions that will fit your unique goals for your family. To see if an attorney can help design a plan to fit your particular circumstances, ask some questions:
- What percentage of your business is devoted to estate planning for farmers and ranchers?
- Have you seen those plans play out completely and work well?
How will you assure that my plan stays current with the law?
If you begin now to ask the right questions you will be able to develop the right plan for your family, and assure that what you have goes to whom you want, when and the way you want, transferring your traditions—not just your net worth.