A comprehensive plan for the family farm is critical for continuing that legacy, especially during these turbulent economic times, according to attorney Dan Purtell with Wilson Law Group.
Purtell says communication is key for every family. Discussions with the next in line allows expectations to be set, so kids aren’t wondering what mom and dad are doing or what’s going to happen. After establishing a clear plan, then it’s time to talk to the family lawyer and CPA to get that plan into writing.
With a farm, there’s both business and personal concerns that go along with succession or estate planning, Purtell explains. Planning — and completing the legal grunt work before life goes sideways — relieves the stress of the unknown.
Purtell says top issues for farm families during estate planning are long-term care financing, tarnishing family relationships, and taxes. Purtell says the average cost of nursing homes in Wisconsin is about $9,200 per month — a large burden for a farming operation. Meanwhile, determining who gets what can lead to a broken family unity, but Purtell says if things are done right, relationships can be saved. While making decisions, keep in mind Uncle Sam is watching, which is another thing families need to be aware of — for example, gifting too much could lead to a 55 percent tax.
Whether a trust, a will or a gift, the transition needs to start out with a foundational estate plan or “mini plan.” The actual succession plan can take up to five years. In this time, laws can change or health can go downhill.
