Business Planning

Why is Estate and Succession Planning a Process?

If you hear of someone heading off to her attorney to do their succession planning, it’s really just one of several meetings that are necessary to draft a sound succession plan, says Dairy Herd in the article “Estate Planning Is A Process, Not An Event.”

In fact, succession planning is a process. Ten years of time can fly by very quickly, so the earlier you can start having these conversations with your attorney, the better.

The amount of time needed to draft a solid succession plan is different for every family. If things are fairly straightforward, it may take only six to nine months. However, it’s not uncommon for this process to take a year or more.

That’s especially true in the ag sector, because once the good weather arrives, this process slows down to a halt—good weather means that everyone is focused on crop production.

There’s no magic age to start the process, but again, sooner is better.

You can spend your entire career building your business. However, very few people have really spent  much time thinking about how they will effectively exit from it.

You may not be thinking of retiring or transitioning the farm operation for 15 or 20 years but having an idea of where you’re trying to get, gives you a better track on which to run.

Succession planning should happen well before retirement, so that’s why the best plans are flexible and adaptable.

Every plan is unique to each family’s particular farm operation (or business) and circumstances.

The best plans are dynamic and draw on the expertise of an entire team of professionals. That way you’re seeing all of those issues and changes along the way.


Reference: Dairy Herd (January 15, 2019) “Estate Planning Is A Process, Not An Event”

Legacy Planning for Family Farms, Ranches, and Businesses

An inheritance is more than money or property, especially when it comes to family farms, ranches, and businesses. Many survive for multiple generations, says the Woodward News in the article “Plenty to consider in legacy planning,” but it takes planning.

Knowing that one day your grandchildren, and hopefully, their children, will walk the land their great-grandparents did, and take the same satisfaction in knowing that the work they do, is a part of our country’s economy. Every family’s situation is different but one thing they all share in common, is that succession goals need to be evaluated critically, even though there is great emotion involved in passing on a legacy.

Dividing assets, sharing control and management decisions and transferring ownership are all things that must be examined and formalized as part of a succession plan.

For starters, determine the overall goal. Every family’s goals are different. Should assets be held for end-of-life-care for aging parents, passed on to children, donated to charity or are they needed to ensure the successful transition of the business to the next generation?

People work hard their whole lives to accumulate assets, so it’s important to have a legacy plan.  In this way, everything you’ve worked for is preserved for the next generation or available for your needs as you age.

In 2019, gift and estate tax exemptions are up dramatically, but strategic planning still needs to be done.

For farm families, the Farm Journal Legacy Project offers printable downloads, including a succession planning action guide, family meeting agenda, conversation starters and a goals clarification worksheet.

Family meetings will need to tackle some topics that may benefit from the presence of an estate planning attorney, who is experienced with family farms and succession planning.

  • How will the transfer of property, including farm equipment, property, and livestock, be done with minimal taxes due?
  • How can the non-farming members of the family receive their fair share of their inheritance, without taking away valuable resources needed to keep the farm or ranch going?
  • What resources will be available for the older parents to live on when they retire?
  • Can the farm support multiple generations?

Succession planning that works best, begins long before the farm family is thinking about retirement. Determining roles and responsibilities and setting accountability for those roles must start happening long before the oldest generation steps away from the day-to-day operations of the farm or ranch.


Reference: Woodward News (Jan. 2, 2019) “Plenty to consider in legacy planning”

Business Owners: How Do You Plan the Succession of Your Business?

After tough years building their businesses, most business owners take great pride in what they’ve created. Some owners are so proud and dedicated to their businesses that they don’t wish to retire. Instead, they intend to continue leading the business they love, until their dying day.

The San Antonio Business Journal’s recent article, “Plan your exit even if you never plan to leave your business,” explains that many owners think it’s okay to delay preparing for their business exit. Some think there’s no reason to plan for their exit whatsoever, because they’re willing to die in the business.

Did Microsoft Founder Paul Allen Have an Estate Plan?

The question isn’t whether the secretive Microsoft founder structured his finances for maximum posthumous impact. It’s whether the estate plan is so well-designed that we’ll never find out.

People who knew Paul Allen say he had a long-term plan. They say his money has been working in secret for decades now, arguably outside his immediate control. Wealth Advisor’s recent article, “Paul Allen Had A $20 Billion Estate Plan (The IRS Can’t Touch)” notes that fact will made it difficult for the IRS to get a share of the estate. …

Business Owners: Why You Need an Estate Plan Today

“What will happen, if you die without leaving a will? It is probably the last thing you want: Instead of you deciding who gets your small business, the government decides.”

Every state has its own rules about how assets are distributed after someone dies, and what happens when the person has not created as will. This is also known as dying “intestate.” If you need a reason to finally get your will done, or to take care of an outstanding legal matter, the article “Head off a small-business skirmish: Draw up your will or estate plan today” from KREM.com should get you started. …

Business Owners: Why You Need an Estate Plan Today

“What will happen, if you die without leaving a will? It is probably the last thing you want: Instead of you deciding who gets your small business, the government decides.”

Every state has its own rules about how assets are distributed after someone dies, and what happens when the person has not created as will. This is also known as dying “intestate.” If you need a reason to finally get your will done, or to take care of an outstanding legal matter, the article “Head off a small-business skirmish: Draw up your will or estate plan today” from KREM.com should get you started.

Here’s a tale from one law office that makes it all very clear.

A business owner died unexpectedly. He had never completed his divorce from his first wife after 20 years. What was he waiting for? It is hard to tell, since he had been in a relationship with another woman for 10 years and they had two children together. Because he never divorced his wife, she inherited his business.

No one likes to consider that they will die, or in this case, that it is really time to deal with their marital status. He probably thought he had plenty of time to plan. However, the result was not pretty. Here’s how you can avoid your own unintended consequence:

Preplan. A business owner needs to do a complete estate plan, so your property, family and business will be protected, if you should become incapacitated or die. You’ll need the following:

Disability insurance. This is a relatively affordable product that replaces up to 60% of your income, if injury or illness prevents you from working.

Life insurance. Consider the cost of providing food, shelter, education and care for your family. How would that be replaced, if you died tomorrow?

Another thing life insurance can do is keep a business alive after the owner dies. Proceeds can be earmarked in your estate plan to be used to meet business costs and spare your loved ones from selling the business for a low amount, because they need to raise funds fast.

Create a succession plan. How will your business go forward without you?

Have your documents prepared. Hire an estate planning attorney who can protect your business and your family. Here’s what you’ll need:

A will and/or a trust. You need a will, especially if you have small children. This is because you’ll want to name guardians for them. A will does go through probate. However, this is only true if your assets are not placed in trusts. Your estate planning attorney will create a plan that fits your needs.

Health care directives. This gives a family member or friend the ability to make health care decisions, if you are unable.

Financial power of attorney. Someone you trust and who has strong business acumen will be able to make financial decisions on your behalf.

Beneficiary designations.  This is where most people make big mistakes. Don’t leave your entire insurance policy to your ex because you forgot to update these. Whoever you name as a beneficiary on your designation form gets the asset, regardless of what your will says. This includes bank accounts, retirement accounts, etc.

Tell your family and/or friends about your plan and your wishes. Let more than one person know that these documents exist, who to contact in the event of an emergency and your wishes.

It’s not as much fun as a day of apple picking. However, planning now is the right thing to do.  It is part of being a responsible adult, business owner and family member.


ReferenceKREM.com (Sep. 18, 2018) “Head off a small-business skirmish: Draw up your will or estate plan today”

Get Help from a Wisconsin Probate and Estate Planning Attorney

The estate planning lawyers of Krause Donovan 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.

To attend a free estate planning workshop or to receive our client planner to assess your estate planning mindset, contact our office by calling (608) 268-5751 or use our online contact form.

Business Owner Without an Estate Plan? Better Start Planning!

As business owners start thinking about the most valuable asset that they own, they need to make some major decisions about their estate plan: do they want to pass the company to the next generation or sell it? In both cases, says Smart Business in the article “Questions for business owners to consider when estate planning,” starting the process of planning needs to begin early to ensure a smooth transition.

If the owner waits until illness or disability occurs to begin planning, chances are good that it will be too late. …

Business Owner Without an Estate Plan? Better Start Planning!

Business owners start thinking about the most valuable asset that they own, they need to make some major decisions about their estate plan: do they want to pass the company to the next generation or sell it? In both cases, says Smart Business in the article “Questions for business owners to consider when estate planning,” starting the process of planning needs to begin early to ensure a smooth transition.

If the owner waits until illness or disability occurs to begin planning, chances are good that it will be too late.

First, the business owner needs to determine, if the business should continue or if it should be cashed out. If the owner wants to see the next generation take over, the owner will need to take a candid look at how engaged various family members are in the business and if they can realistically manage and continue to operate it, without the founder at the helm.

If there are many family members—kids, in-laws, etc.—then roles need to be defined, so everyone knows their responsibilities.

If there are children who have no interest in being part of the business, then a decision needs to be made about how they will benefit fairly.

If one of the owners is not a family member, the owners need to discuss how that ownership is going to transfer, when one of them departs. You’ll need buy-sell agreements in place, as well as a succession plan. What will happen if one of the owners becomes disabled or dies unexpectedly?

The decision to sell the business or plan for the non-family management team to control the business, needs to be made and acted upon. The management team needs to be on board with these decisions and everything needs to be in writing.

The biggest obstacle to smooth transitions for business owners, is failing to make a decision. If the heirs are left to figure things out and end up battling over shares of the business and responsibilities, the business will suffer, and the family is often left needing to sell an unprofitable business that has lost value.

Planning for an owner to step down, should start once the business is successful and profitable. Having a succession plan, which also includes an estate plan, prepares for any unexpected occurrences and allows family members to get comfortable in their roles as future leaders of the business.

Speak with our estate planning attorneys about your plans for your business to ensure that a successful plan aligns with your estate plan.


Reference: Smart Business (Aug. 27, 2018) “Questions for business owners to consider when estate planning”

Get Help from a Wisconsin Probate and Estate Planning Attorney

The estate planning lawyers of Krause Donovan 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.

To attend a free estate planning workshop or to receive our client planner to assess your estate planning mindset, contact our office by calling (608) 268-5751 or use our online contact form.

What Happens to My Business After I Die?

Most people only think about estate planning in terms of their personal assets, but what if you own or co-own a business? How does death affect the business? More importantly, what kind of business succession planning do you have in place to deal with your sudden or unexpected death?

Perhaps not surprisingly, most Wisconsin business owners have not done any succession planning. Some people assume the business simply dies with them. Depending on how you structured your business, however, that is not necessarily true. Even if the business is simply you, and you never created any separate legal entity, there will inevitably be certain matters that need to be wound down upon your death.

Planning Your 2016 Retirement Plan Contributions

Planning Your 2016 Retirement Plan Contributions

Retirement planning and contributions have been a part of America since 1875 when they were first introduced to the workforce as a private pension plan. Twenty-four years later, there were 13 private pension plans in the country and in 1913, the federal government stepped in and began taxing pensions paid, stating they were similar to wages and therefore must be taxed.

Over the years, the government has set limits and added new regulations to ensure the continuity and effectiveness of retirement plans. Most people who are financially-savvy like to view the retirement plan contributions periodically. The best time to review is towards the end of a calendar year or the beginning of a new calendar year. This way, you can contribute more to your retirement plan, if you can afford it and have not reached your limits.

In December of 2015, the IRS announced that retirement-related items and limitations for pension plans for 2016 would remain the same. …

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