As we work with our clients on legacy plans for their farms, I hear stories about some farmers who have hesitated to get started. I recently heard about one farmer who hasn't done any legacy planning yet.
The topic of legacy planning had come up during a conversation between him and his wife. She was very concerned about the current lack of planning – and told him about her worries. He later told us, "It's very scary when your wife looks at you that way." Often women play this role….the worried one, the one who is pushing the issue. Women live longer and are more likely to be the benefactor of the plan or the victim when there's none.
It's a selfless act for the next generation. It's also for our peace of mind and our spouse's peace of mind, knowing that the farm will transfer to the next generation and the whole family will still be in harmony with each other.
Think of it like this: When you purchase life insurance, you're not getting it for your benefit. You want to protect the people closest to you – your family. A legacy plan and estate plan work in a similar way. If you don't work on your farm transition plan or if you wait too long to start, your plan won't be very effective. That's really hurting them – not you.
Working with a legacy advisor early on gives you the opportunity to proactively address issues that often come up in the legacy planning process. You can figure out the best way to deal with issues of fair vs. equal in your family, how to go about gifting farmland, and have opportunities to address changes in estate tax law. A plan that's hastily thrown together doesn't allow you time to solve these issues effectively for your farm.
As we get deeper into this spring season, think about what you really want for your family and for the legacy of your farming operation. It's a hopeful, expectant time of year for us in farming. Start conversations now about a legacy plan for the future of the farm – and watch as that hope emerges and spreads through the whole family.
They will see that you're thinking of them and their futures when you start talking about and working on a legacy plan. And that's the greatest gift you can give them.
Darren Frye grew up on an innovative, integrated Illinois farm. He began trading commodities in 1982 and started his first business in 1987, specializing in fertilizer distribution and crop consulting. In 1994, he started a consulting business, Water Street Solutions to help Midwest farmers achieve success through financial analysis, insurance, commodity marketing, and legacy planning. The mission of Finance First is to get you to look at spreadsheets and see opportunity, to see your business for what it can be, and to help you build your agricultural legacy. Contact Darren at email@example.com.
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