Seminar prepares producers for estate planning
Estate planning is something a lot of people know they need to plan for, but they don’t start taking action until later in life.
For family farms and ranches, it has become a growing problem. According to the United States Department of Agriculture’s National Agricultural Statistics Service (NASS), family farms make up 97% of the 2.1 million farms in the United States, but only 30% of those farms survive to the second generation and 12% to the third.
There can be various reasons why farms and ranches are struggling to survive, but one of the main reasons is the lack of a survival plan.
Despite the lack of planning, the issue has become a normalized topic.
A Farm and Ranch seminar was held in Lewistown by the Pathwise Group in conjunction with JCCS and the law firm Scott Tokerud and McCarty.
Pathwise Group Founder Jared Brown explained, “It seems like it’s become more of a conversation starter that people are looking for resources in the farm and ranch environment. I think Covid has caused people to consider that things beyond their control are happening, and then the demographic people are getting a bit older in terms of who’s running the operations. Then you bring in kids who are much more aware of estate planning and they kind of want their parents and the operation to go through a process, so they can plan for it. A lot of kids want to come back and get into the environment and the industry. In recent years we have seen a slight increase in this area. So I think they’re really pushing their parents to do something on the estate planning side. »
Since the start of the pandemic, the number of 18-34 year olds with estate planning documents has increased by 50%, but a estimated 1 in 3 Americans who don’t have a will or living trust claim they don’t have enough assets to leave behind.
Brown said the planning process should be handled in two different ways: it should be handled as a business, as well as a personal situation.
Brown said: “Sometimes we see several different companies layered on top of each other and then they have the personal storyline. We have to look at how to protect them personally and what they need to do, but also they have a business, so what is it? what is the transition plan?What is the balance of estate between children, who will also be employees or owners?So really, estate planning of a farm and ranch component is much more about separating, but personal and professional, then to make sure you plan accordingly to protect what’s important to you and make sure things go your way.”
Keith Tokerud said that one of the mistakes people make when estate planning waits too long.
“By the time people are married, they should be thinking about estate planning, nothing else, to appoint guardians for their children. Then when you get older and you have more assets and you want to protect those assets for your spouse and for your children. , it’s a good time to plan. And then if you’re in your 60s and you have no planning, I don’t like the chances of something bad happening and may your family really be warned of a train wreck there is no magic age to do this but definitely to me if you haven’t done this in your 60s now is the time to become really serious.
Tokerud added, “One of the reasons we try to do estate planning is to avoid conflict within the family. I think mom and dad do the initial planning themselves, and they share with the people who should know, which are usually the kids. It’s not for the kids to tell mom and dad what to do, but once mom and dad have some planning in place, it’s good to have the opinion of the children and certainly to explain to the children why mom and dad did certain things. For example, in Montana, many farmers and ranchers do not have enough assets besides the farm to treat all the children non-farms the same way. They want the farm to stay in the family. That means we have to give the farmer more. If this isn’t explained to the non-farm kids before mom and dad are gone, it can cause a lot of grief and misfortune among family members. Communication is great among family members.
If you are a farmer or rancher looking to plan your estate, you can always make an appointment to set yourself up: https://pathwisegroup.com/