Planning for your family farm’s future is a unique combination of estate and business planning, requiring attention to detail and understanding of family dynamics. Furthermore, because some farms can be capital intensive and have many assets, family farmers need to take into account how taxes and the probate process might have an impact on the state of the farm after it passes to the next generation.
While every family farm is unique, there are some common considerations that Wisconsin farmers usually take into account when creating their estate plans. Because these decisions can have a significant impact on the quality of life during retirement and the farm’s existence, families need to be proactive and open with each other about the farm’s future.
First and foremost, family farmers need a succession plan on whether or not a child will continue to run the family business. These days, as more and more rural young people move to the suburbs and the cities, most parents cannot count on the children to stay on the farm and run day-to-day operations.
When one or more children do agree to take over the family farm, integrating family into the business operations and management can be more difficult than one would think. Some of the most common familial issues can include parents unwilling to cede total control to the children, the ability for the farm to produce enough income if two children take over, managing styles, and the pace of modernizing assets.
Like other estate plans, farmers need to make decisions on powers of attorney to make decisions on medical care and end of life scenarios should they be seriously injured in an accident, whether that be on the farm or anywhere else. Powers of attorney allow a trusted person, usually a spouse or family member, to make financial and medical decisions in the event the individual is incapacitated.
Additionally, farmers need to decide whether to create a trust or leave their assets to heirs in a last will and testament. Should the farm be left to heirs in a will, the estate will need to pass through probate and could end up being an expensive and time consuming process depending on the circumstances and the state of the farm.
Often times, family farmers choose to create a living revocable trust to pass the farm onto a child under the Wisconsin Marital Property Act. Wisconsin is one of the only states in the country that permits a living trust to be funded after the death of the Grantor while still avoiding probate. Although there are many more things to consider when passing on a family farm, including taxes and finances, these are some of the biggest issues to start with and discuss with an experienced Madison trust and estate lawyer.
Madison Trust and Estate Lawyers
The estate lawyers of Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.
Contact our office by calling (608) 292-5185 to schedule a consultation or use our online contact form.