Earlier this spring, I had the opportunity to speak in a webinar alongside Carolyn Thompson, attorney and owner of Thompson Law, P.C., who specializes in estate and business planning services.
During the webinar, I shared stories of estate planning gone wrong, familial relationships turned sour and problems that have crept up in my own ranching family and those of people I know due to mistakes made in the transition planning process.
Thompson, in turn, shared her legal advice and considerations for how the outcomes could have changed in these scenarios, had different decisions been made along the way.
As a producer with three young children myself, I soaked in her wisdom, keen to not repeat mistakes of the past and determined to create a positive outcome and a strong legacy for my children once I’m gone.
Following our presentation, Thompson shared with me a pamphlet she gives to her clients. In it, she shares succession planning success stories, as well as common reasons that people avoid getting started in securing their legacies.
She warns clients not to bet the farm and to avoid these six common myths in the estate planning landscape, including:
1. I have time to do this later…there’s always tomorrow.
2. My business is my business…it will stay private.
3. I don’t have enough assets to do estate planning.
4. My spouse can handle everything when I’m gone.
5. Our family is so close. Nothing can come between us.
6. I can’t afford to put an estate plan in place.
If you and your family have already gone through the estate planning process, she urges producers to go through a confidence checklist to determine how solid your plan really is. Her checklist includes these nine items:
1. I have an up-to-date, written emergency operation plan; one that is signed, easily accessible, and delegates who the board of directors, head of operation, or other key personnel will be to step up and take responsibility, in the event of my inability to operate the business.”
2. I have adequate overhead insurance to cover additional expenses if I am not working due to incapacity or other reasons.
3. I have up-to-date, effective Power of Attorney documents appointing the right person to handle my health and financial affairs should I become incapacitated.
4. I have coordinated my personal estate planning with my business succession planning.
5. I have adequate personal disability income insurance (or I have assets or other income to support day-to-day expenses) to ensure that my family’s needs and the additional expense do not put a stranglehold on the business.
6. I have appointed a communications director and have a written plan or “fire drill” in place, in the event of my inability to operate the business, one that I review and revise accordingly.
7. I have adequate long-term care insurance should I need to enter a nursing home or should I require at-home care providers (or I have assets or other income to support such expenses).
8. I have an up-to-date buy-sell agreement in place, one that is adequately funded with either life insurance, company assets, or built-in financing via installment payment options.
9. My family and employees understand our core values and can fulfill them in my absence.
“Just like they say, the best time to plant a tree is 10 years ago, [and] the best time to get a solid foundation for your business and family is now, before a crisis becomes a reality,” says Thompson. “Having the right documents in place and reviewing them annually will build your confidence and better enable a successful transition, whether short-term, long-term or permanently.”
Your legacy matters. Your children and grandchildren matter. Your values and beliefs matter. Your lifetime of hard work matters, too. Make it all count by having your affairs in order. It’s not always fun to think about death, finances and the potential emotional fallout of the family, but if your plan isn’t secure, you’re leaving it up to fate, instead of your decision-making, to determine the outcome of your family, your farm and your legacy.
The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.