As a fifth generation rancher, I’m very aware that I’m lucky to be following in the family tradition of being in production agriculture. After all, two-thirds of family businesses don’t succeed past the second generation, so to still be here, running cattle and raising my kids in the country, makes me feel incredibly fortunate and blessed.
Granted, this life isn’t always easy. It takes a lot of sacrifice, hard work, scrimping and saving, smiling through heartbreaks and preserving despite volatile market swings, unpredictable weather, breakdowns, meltdowns and the unexpected twists that a career in production agriculture can bring.
It isn’t for the faint of heart. But even in the tough times when quitting seems so tempting, I say to my husband, “What else would we do with our time that would be so fun?”
READ: 3 things a transition plan should accomplish
Thankfully, we have great role models in my parents and grandparents who have lived frugally, made smart investments and have set themselves up for a smooth retirement and an easy transition to the next generation. Perhaps some things had to be learned the hard way, and I guarantee if they could go back, they would do some things differently along the way. But ultimately, it’s been a written plan that has helped our business continue moving forward with each generation.
I can’t imagine working my whole life building a dream and a legacy only to lose it to an error in the planning process or failing to do any planning altogether. I want my children to reap the rewards of the next 30-40 years of my hard work.
That’s where a good lawyer, financial planner and tax accountant come into play. Having a great team to help you protect your legacy is critical, but what kind of plan do you really need to cover all your bases?
READ: 6 estate planning myths
I recently read a great article that talks about estate planning and the items that need to be addressed in a written plan. Aside from avoiding estate taxes, Carolyn Thompson, attorney at Thompson Law, P.C. in Sioux Falls, S.D., lists 10 things that need to be discussed when estate planning.
Consider these sometimes forgotten items when visiting with your estate planning team.
Thompson writes, “The plan should prepare for your incapacity, not just for your death. It’s increasingly likely that the average person will experience one or more periods of incapacity during their lifetime. A trust can allow for the seamless management of assets during those periods of incapacity.”
“The plan should consider the need for the continued management of the assets after your death,” she says. “If the beneficiaries aren’t of sufficient age or maturity, the assets could continue in trust for their benefit.”
READ: Ready to transition the ranch? Slow and steady wins the race
3. Divorce protection
She explains, “The plan should consider the potential need for divorce protection for the beneficiaries. Nearly half of marriages end in divorce. Even if your beneficiary appears to be happily married now does not necessarily mean divorce protection is unwarranted.”
4. Asset protection
“The plan should consider whether the beneficiaries will have creditor issues,” she advises. “For maximum asset protection, the assets for the beneficiary can be left in a fully discretionary trust with a third-party trustee.”
To read the additional six items on her list, which include long-term care planning, beneficiary designations, special needs, IRAs/retirement plans, income taxes and property taxes, click here.
These discussions may not be fun, and death may be difficult to talk about, but failing to plan is planning to fail. You haven’t worked your whole life just to lose everything at the end, have you?
Make the call and get started, or if you already have a plan in place, maybe now is a great time to review and make adjustments as needed.
The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.