For California families who own farms or ranches, estate planning is essential to help ensure that the businesses they've worked so hard to build and maintain continue on successfully when they're no longer around. However, as with all types of estate planning, too often it gets neglected.
Succession planning, just like all estate planning, involves contemplating one's own death or at least a time when they're no longer able to manage their affairs. Many people also put it off because they think it's too costly. However, as one California estate planning attorney notes, failure to develop a plan "could be disastrous for heirs when it comes to control of the assets and taxes." He says that leaving matters for your children to fight over in court "is about the worst thing you can do."
In addition to laying out your intentions for your business and keeping the farm or ranch in the family, a properly-drafted estate plan can save your heirs from having to pay unnecessary taxes down the line. It's essential, as with any estate plan, to keep it updated as changes to your family occur.
Estate planning for farmers and ranchers is unique because their children may not be willing or able to carry on the family business. For children who aren't involved in continuing the family business, there are ways to leave them money, such as a life insurance policy or irrevocable life insurance trust.
A California estate planning attorney with experience in developing plans for farms and ranches can help you develop a plan that is right for your business and your family. By doing this, you help ensure that the land and business you love will be in good hands when you're gone.
Source: AgNet West, "Succession Plans can Assure Farms Stay in the Family," Oct. 20, 2016