For each season, there is planning that you must do on the farm. In order to be successful, this planning must be done thoughtfully and in advance. Your life is no different. To properly plan for the next season in your life and the lives of your family, a well-executed estate plan is a must. Below are a few documents to consider when crafting a plan to protect yourself, your family, your business, and your legacy.
Trust:
A trust is a written agreement that is funded with the assets that you own and names a trustee to oversee and administer the assets on behalf of named beneficiaries. In the beginning, you can be both the trustee and the beneficiary. One benefit of a trust is that, should you become incapacitated, the successor trustee that has already been named in the written agreement and can seamlessly step in and continue handling the financial assets owned by the trust on your behalf. Thereafter, when you pass away, the remaining assets will be allocated according to your instructions in the trust. Because the assets are deemed to be owned by the trust, and you have already determined what will happen to them, there will be no need for probate. A specifically-crafted trust has the additional benefit of protecting your assets (the farm) from the creditors of your beneficiaries.
IMPORTANT: You need to make sure that you work with an experienced estate planning attorney to ensure that any trust that is created and funded with farming assets is structured in a way that does not disqualify or reduce any governmental farming subsidies you could be receiving.
Financial Power of Attorney:
A financial power of attorney is a written document in which you appoint a person to handle a variety of financial and property transactions on your behalf. This can include signing contracts for you, making deposits into your bank account, managing property, paying taxes, and opening new accounts for you. The specific powers given to an agent under a power of attorney will depend upon your wishes and what you list in the document itself. If your land, equipment, and associated bank accounts are in your name alone, it is incredibly important to have this document in place so someone will have the authority to maintain your business and associated transactions should you be unable to do so.
Medical Power of Attorney:
Farming can be a very strenuous and taxing career. Having a medical power of attorney in place is therefore crucial. This document allows you to name an individual to make medical decisions on your behalf in the event you are unable to do so. While this is only applicable if you are incapacitated or otherwise unable to communicate your own wishes, this document will save your family a lot of time and money by making it unnecessary for them to go to the court to have someone appointed by a judge.
Putting a plan in place isn’t always the most exciting thing, but it’s an important piece of making sure that your legacy is protected and your beneficiaries are provided for.
