Content ID


Is There a Way to Know that Everything Is Taken Care of Prior to Death?

Can their problem be solved?

Submitted by  P.K.

I try not to think of myself as a worrier, but I often find that I wake up at night or I think of things that I may not have addressed in my farm distribution planning. I think about all the what-ifs and wonder if I’ve missed something. I just want things to go smoothly when I die so my farm can continue and my children will be happy. How can I know I have everything done? 

The Solution

P.K., any plan that involves money and people can have problems. However, there are a lot of things that can be done to make sure things go as smoothly as possible. As I was thinking of a response, I tried to correlate the theme to something we farmers could relate to like a preplanting inspection or preharvest inspection. The first thing that popped into my head was a predeath inspection, but that sounded kind of harsh, so I will call it a predistribution inspection. Here is a quick checklist. 

  1. Do you have a formal plan in place, or is it just something that has been formulated in your mind? It’s crazy how many times people have told me their plan and then when I see the documents, I wonder if it’s the same estate.
  2. Have all the documents for this plan been signed? I have observed countless documents prepared by attorneys but never signed by the client.
  3. Do all your deeds and other assets’ ownership align with other legal documents?
  4. Have all the people whose livelihood is tied to your plan been informed of and understand your intent? Things can start to go wrong even before you die when people start to guess or assume your plan because you haven’t told them.
  5. Try out your plan! When was the last time you crunched the numbers to determine if your plan is actually financially feasible for the next generation? Oftentimes, people randomly put a discount number in place for a buyout option without calculating the cost per acre for a loan or breakeven. These numbers have changed a lot over the last 10 years.
  6. Will your plan still be effective and efficient if the tax laws change?
  7. Does your plan have some contingencies if people die out of order? This does not happen often, but when it does, there should be a plan B.
  8. How would a divorce or an extended nursing home stay or the bankruptcy of a child affect your plan? 
  9. Does the plan have a rental formula if you’re either incapacitated or aren’t around to make that decision? Recently, I had a nonfarming heir call very frustrated that a farming brother was taking advantage of his siblings. A flex-rent agreement was in place and everyone’s rent had gone down. The only thing they could observe was that “corn price went from $6 down to $3, but one thing shouldn’t make that much difference, should it?”
  10. Is your plan clear if you intentionally want to include or disinherit someone from your plan, like in-laws and stepchildren?
  11. Does your plan minimize estate distribution costs? 
  12. Have you checked ownership and beneficiary designations on life insurance and retirement accounts?
  13. Make sure you know where you are going. Ultimately, that is the most important part of your plan.

If you’ve addressed the checklist above, you as the giver should sleep well. Then it will be up to the receivers to graciously accept your gift.

Read more about

Talk in Farm Business

Most Recent Poll

Will you have enough on-farm storage for harvest?

I just want to see the responses
46% (22 votes)
35% (17 votes)
No, it’s going to be a bin-buster
8% (4 votes)
Maybe, depending on yields
6% (3 votes)
No, I am looking at new bins or temporary storage
4% (2 votes)
Total votes: 48
Thank you for voting.