What are some common mistakes that farmers and ranchers often overlook regarding estate planning? Don’t let these critical errors jeopardize the future of your hard-earned legacy.
RFD-TV Ag Legal and Tax Expert Roger McEowen with the Washburn School of Law complied a list of the most common mistakes he sees farmers and ranchers make when it comes to estate planning:
Common Estate Planning Mistakes of Farmers
- NOT ensuring property title ownership complies with your overall estate planning goals and objectives. This includes the proper use of jointly held property, IRAs, and other documents that have beneficiary designations.
- NOT knowing what the language in a deed means for purposes of passage of the property at death.
- NOT leaving everything outright to a surviving spouse when the family wealth is potentially subject to federal estate tax.
- Thinking that “fair” means “equal.” If you have both “on-farm” and “off-farm” heirs, the control of the family business should pass to the “on-farm” heirs, and the “off-farm” heirs should get an income interest that is roughly balanced in value to that of the “on-farm” heirs’ control interest. Leaving the farm to all the kids equally is rarely a good idea in that situation.
- Letting tax issues drive the process.
- NOT preserving records and key documents in a secure place where the people who will need to find them know where they are.
- And NOT routinely reviewing your plan. Life events may have changed your goals or objectives.
Conclusion
I could list more, but these are some big ones. Try to avoid these mistakes with your estate plan.
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