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26 February 2017 - Let’s Get It Done

I spent this past week in the Valley of the Sun - Phoenix, Arizona. One of the reasons I was here - to participate in the Annual Outlook Meeting of the Phoenix Agricultural Club. It is an interesting group comprised of many ‘snowbirds’ from the Midwest, as well as active farmers & ranchers from Arizona. Some are totally retired while many are still actively involved in a family farm or ranch enterprise who want to get away for a few weeks to a warmer climate before going back home to start the new crop year.

One of the main topics on this year’s program dealt with Estate Planning, putting a succession plan in writing to pass the farm or ranch on to other members of the family, something I have been talking about on Samuelson Sez for decades. Obviously, it is something that is difficult to do, sitting in a family discussion, including Mom And Dad, and talking about life after they are gone. But frankly, I was surprised that we have made very little progress in getting people to do estate planning over the past ten years.

A survey of over a thousand farmers by the U. S. Department of Agriculture showed that 27% of the farmers and ranchers approaching retirement had a succession plan for the family farm. The rest of the farmers and ranchers did not and that is only 2% more than 10 years ago when a similar survey was taken! That means three-quarters of farmers do not have an estate plan.

I have many friends who are professionals in estate planning for farmers and ranchers who keep telling me to tell you that one of the worst things you can do as a parent is to leave this planet without having a legally written estate plan in place. Since none of us know the date of our departure, it is something you start working on right now. It should involve every member of the family in putting it in place, including sons and daughters-in-law.

I have seen so many horror stories of families being torn apart because parents left no succession plan; brothers and sisters no longer speaking to each other and spending thousands of dollars fighting in the courtroom to get what they consider is their fair share of the estate. In one case two sisters who had no interest in farming the land, but just wanted the money immediately, made it impossible for their brother to keep the farm in place and expand it for his family. You would be surprised how often this happens.

Then, there is the matter of taxes. I was recently involved in a conversation with five farmers and a tax attorney. Four of the five said they did not have an estate plan, and the attorney quickly jumped in and said “You may think you have no plan in place, but you do, it’s called the IRS. They love it when you have no legal written plan because that gives them the opportunity to step in and take in taxes what you worked a lifetime to put in place”.

There are so many other reasons why this should be done; there are so many qualified attorneys available to help you and your family do it. Regardless of your age, the time to start is now, so let’s get it done.

My thoughts on Samuelson Sez.