Estate planning is a personal indulgence, since the planner often needs to consider the opinion of other family members, along with his own wishes. The attempt to avoid a conflict, calls for serious family discussions and honesty, regarding every family member’s intentions. Farm operators approaching retirement have a lot of concerns regarding the provision of sufficient income post-retirement, tax minimization strategies and the provisions to be made for the children, who wish to continue farming. A farm estate plan should be assessed periodically.
Estate-planners usually attempt to design a reasonable division of assets, bearing in mind the age, education, relationship and needs of the beneficiaries. Infants are generally given a larger share than the self-sufficient children, who have established their own occupations. Farm estate planning involves the consideration of the income needs of the dependants and the spouse. Often, a preference is given to children who have helped in managing the farm. In majority of the cases, farm holdings are not large enough to provide a sufficient resource base, for more than one operator. As far as possible the estate plan should attempt to transfer the farm holding to the individual who is farming or intends to farm. This should be accomplished by sale, lease with option to purchase, gift or donation.
Efficient farm planning requires a will to be drafted, which clearly outlines how the estate is to be distributed, after the person’s death. Provisions can be made for the person to dispose a part of the property, to pay the other beneficiaries, in cash or kind. However, keeping the farm in one piece may not be so important, when none of the family members wish to farm or when the farm is very large. The expertise of individuals with adequate experience in farm estate planning should be considered.