Plan estate for now
A few years ago, I signed up to ride in the Tour de Kota, the 450-mile bike ride through South Dakota. I signed up thinking it would be a nice bonding opportunity for my then 13-year-old son and me. But there was a problem — I hadn’t ridden a bike since I was a child! The idea of riding 450 miles was so overwhelming that I didn’t know where to start. So, I started with the bike. I went to a great bike shop in town, and the staff helped us get the equipment. They offered training tips to help us get started. I started small: 10-mile rides, then 15-mile. I found that when I quit looking at the daunting, overwhelming number of 450 miles, and the unknowns and doubts that went with it, I could do what it took to prepare myself. I was no longer paralyzed from acting. It was one step at a time, and it was fun!
I have seen this same phenomenon when setting up an estate plan. The “what ifs” of the distant future threaten to keep people from even beginning to create a plan. They don’t want to put a plan in place for fear that some circumstance could change, or they think they have to have 450 answers to questions they don’t even know. For farmers, it might be that they don’t know how long they will be able to farm, or whether another family operator will join the business, or whether the one currently in the business will continue farming. The distant future holds too many unknowns, and it causes inaction in the present because the unknowns seem too overwhelming.
But the reality is that the unknowns will continue to be unknown until they are known. Because we don’t have the answers for what’s going to happen in the future, we plan for now. This happens all the time in day-to-day living. In your day-to-day operations, you live based on the best information you have available — and then adjust as the need arises. You may not know what corn prices are going to do, or land prices, but you make your decision to buy or sell based on the best information you have available to you at the time. You do not buy the tractor or the fertilizer you think you might need in the future; you buy the equipment and inputs that will be best for your circumstances now. You plan for now, not 10 years in the future.
This same approach applies to estate planning. You plan for now. I have found if you stay focused on the next five years, you can focus on what works for your family for now. Establish a plan that you believe will fulfill the needs and circumstances you can reasonably foresee in the next five years. Getting too far ahead in what might happen in the future can cause you to miss what is important now. It’s important to remember, however, that one of the unknowns is death (not as to occurrence, which is a certainty, but as to its timing), which is why it’s imperative to have a plan in place sooner rather than later. But be reassured that most components of an estate plan are not set in stone — they can be changed as life changes. Often with estate plans, when changes are necessary, they are not major overhauls, only small adjustments. For instance, if a child later comes back to the farm, a plan can often be altered to include provisions that he or she receives the operating site, or that ensures upon your death that the child can continue the operations. You can change your estate plan as you see the goals and circumstances of your beneficiaries change.
Don’t let the future’s “what ifs” stop you from putting a plan in place now. It all begins with the first step — just like my first few miles on the bike. Set up an appointment with a qualified estate planning attorney. Keep focused on the next five years. And know that most components of an estate plan are revocable, meaning they can be updated and amended as life’s circumstances and needs change. A qualified estate planning attorney can advise as to which estate planning strategies and options will work best for you in your individual circumstances. Don’t stay “off the bike” because the distance seems too long; work with a professional who can provide the training tips and tools you need to accomplish your goals!
Thompson, Sioux Falls, S.D., is an estate planning attorney. For more information, contact her at 605-362-9100 or see www.cathompsonlaw.com.
This article published in the August, 2014 edition of DAKOTA FARMER.
All rights reserved. Copyright Farm Progress Cos. 2014.