How farmers can start an estate plan
Planning for the end of your life can be intimidating. When you are a farmer, your business is not only your livelihood and your passion, but, often, it is also intermingled with your family life. For that reason, estate planning — arranging for the management of your assets once you die — is especially important for aging farmers.
“Everybody knows they’re going to die, but it’s not the most fun thing to talk about,” said Richard Brzozowski, project director for Maine AgrAbility, a non-profit collaboration with the University of Maine Cooperative extension that assists people working on farms, fisheries and forestry careers while aging or managing chronic illness or disability. “It’s important for these conversations to start.”
For aging farmers looking to get started with the estate planning process, here are a few simple steps and tips to help demystify the process and jumpstart your estate planning journey.
Write down your goals
“You’re really looking at business transition,” said Gary Anderson, extension animal and bio-sciences specialist at the University of Maine Cooperative Extension. “It’s similar to retirement decisions that somebody might make for a job but it’s much more complicated because there’s a lot more resources you have to deal with and probably a lot more people.”
Having a clear set of goals will make that transition easier. Anderson recommended writing down your goals and dreams for the transfer of the farm — as well as your fears.
“By writing [your goals] down, then the legal team can work with those to come up with an acceptable plan,” Anderson said.
Gather a team of professionals
Anderson said that a basic estate plan can be as simple as a will, a medical directive and a power of attorney. A solid team of professionals will help facilitate the various elements of estate planning.
“You’re going to need to go see your lawyer and put together a team of your lawyer, your accountant, your financial advisor and insurance professional,” Anderson said. “If there’s a lot of discussions, a family counselor for a lot of those family meetings would be super helpful.”
Compile a list of your assets
Anderson also recommended compiling a complete inventory of all the assets you own, including the deeds to all the tracts of land in your possession.
“You have to have a complete inventory of all the assets that you own,” Anderson said. “Sometimes you own several tracts of land that each have their own deeds. Who owns it and how is it owned? What’s the best way to move that land? Then you want to discuss how that transfer would take place.”
Find a successor
Knowing who will take over the farm when you die is essential to ensuring the longevity of the farm business you worked so hard to build. When it comes to transferring these assets in family farm businesses, inter-generational politics can be tricky when it comes to estate planning.
“You’re really looking at the succession of that farm from one generation to another,” Anderson said. “How do you, in an orderly way, make sure the needs of the generations are met?”
If you do not have a family member that is interested in taking over the farm, Anderson recommended organizations like Maine Farmland Trust, Land for Good and Farm Transfer New England to help connect you to young farmers who would be able to take over the business.
Reach out to your local cooperative extension
If you feel intimidated by the process of estate planning in general, you can turn towards your local cooperative extension to help get you started. Some extension offices even have lawyers on-staff to consult with farmers looking to get started with estate planning.
“There are some great extension bulletins that deal with estate planning in general,” Anderson said. “If [you] don’t have the means to access the web or aren’t comfortable with that, call the extension office and we can get some materials sent to [you] as well.”
When it comes to estate planning, Anderson said it is never too early to start.
“I tell people when they get out of high school, they really need to be thinking about retirement and how they’re going to plan for their retirement,” Anderson said. “As you get closer to that time, then you have to have a pretty good idea of what’s going to happen, how it’s going to happen and when it’s going to happen.”
In general, Brzozowski recommended reaching out for help with estate planning early and often to make sure the transition goes as smoothly as possible.
“You shouldn’t be ashamed to ask for help,” he said. “It can be complicated.”