Why Farmers Avoid Estate Planning
- Posted in: Estate Planning
As more and more American farmers reach the age of retirement, they sometimes feel that they are being forced to make decisions about what will happen to their farm after they pass on. Farmers typically have two options, (1) sell the farm, or (2) pass on the farm onto remaining family members or relatives. As a recent article explains, most farmers fail to make either of these choices.
Estate planning is especially important for farmers because they reinvest most of their profits back into their farm. This means that a farmer’s personal wealth is often intermingled with the farm itself. Moreover, the value of the farm often makes it difficult for the farmer’s preferred successor to purchase the farm. Farms therefore suffer because the primary farm operator who should logically take over the farm cannot afford it.
Most farmers avoid estate planning because it is difficult to keep up with the ever-changing tax code and the reluctance to think about a future without them in it. The first thing farmers should do is to seek the help of an experienced estate planning attorney to help determine whether they would like to keep the farm in the family or sell it. Farmers should speak with their children and grandchildren about this decision, and ask whether any family has an interest in taking over the farm operation.