Beyond never starting the estate and succession planning process, attorney Polly Dobbs says the second most-common mistake farmers make is thinking it’s a one-and-done proposition.
“Farmers think, I don't need to do an estate plan because I did it in the 1990s, so I'm all set,” says Dobbs, owner of Dobbs Legal Group in Peru, Ind., and a member of the Farm Journal Legacy Project Advisory Team. “But laws change, and that directly impacts what your estate plan ought to look like.”
In addition, farmers’ assets and family relationships change.
“I had one old fellow just scream at me because he was so mad that we had to fix a bunch of stuff when he was 95,” Dobbs says. “His wife had been dead for about 20 years and they owned property in four states. It was set up to be a nightmare with probate and other unintended consequences. But he thought that the plan and he and his wife did back in the 1990s was just going to get them through till they both died.”
Therefore, Dobbs advises farmers to dust off their plan and revise it as changes change.
“Know it's a living document that needs to be tweaked over time to make sure it is as tax efficient as possible,” she says.
Review, update and modify your plan every five years, Dobbs advises.
There may be other times, such as when you apply for a line of credit or meet with a business or financial advisor, that also serve as good times to dust it off.
“Listen to your advisers,” Dobbs says. “But, be responsible for your own plan and make sure that that you know whether it's time to get in and make an adjustment.”
Dobbs will be presenting at the 2017 Top Producer Seminar. Her breakout session is entitled: Beyond the Simple Will: More Estate Planning Now, Less Fighting Later. Learn more and register now.