As a farmer here in South Dakota, you care greatly about what will happen with your farm when you are gone, such as whether it will stay in the family. So, you have created an estate plan to address important issues regarding the future of your farm.
By doing this, you have already avoided one of the major estate planning missteps farmers can make: Not having a plan in place at all. However, there is still work to do. What you do after you set up a plan can have big impacts on the plan’s overall effectiveness at achieving your goals regarding your farm and your loved ones. We’ll now go over some of the things that can be very impactful after setting up a farm-related estate plan.
What you tell your loved ones about the plan
What will happen with a farm in the future and issues regarding death can be sensitive topics within a family. So, some farmers may be reluctant to discuss these topics with their loved ones, and thus tempted to keep their estate plan a secret. However, not communicating with your loved ones about an estate plan could have serious consequences. It could lead to your loved ones having inaccurate expectations about what will happen with the farm and other key assets after you pass away. This could lead to arguments within your family after your death, which could create great tension within the family and complicate the execution of your estate plan.
So, open and honest communication with family members about a farm-related estate plan can be important. You may want to give clear explanations to your loved ones of what your estate plan will do and why you decided to have it do this. Clear communication can go a long way towards setting accurate expectations within a family and clearing a path for things to go smoothly after you pass away.
Whether you keep the estate plan updated
You may have worked very hard to ensure that your estate plan is a good fit for your overall circumstances and those of your farm and family. However, circumstances can change. If your plan isn’t adjusted to reflect changes that occur, it may no longer be well-aligned with your goals.
So, simply setting a farm-related estate plan and then forgetting about it can be very risky. Plans can be updated, so regularly reviewing your estate plan to see if adjustments need to be made due to changed circumstances can be wise.
How good of records you keep
One thing that can have an impact how effective an estate plan is at achieving your goals is how the people named to important roles for the plan, such as the personal representative and anyone designated with a power of attorney, execute their roles. Many things can have implications regarding the ability of such individuals to execute their roles smoothly. This includes how easily they can access the records they need.
So, if you fail to keep good and organized records regarding the farm and your other assets, you could be making things much more difficult for these individuals. This, in turn, could complicate things for your farm and your loved ones.
Given this, you may want to pay close attention to your record-keeping and record-organization habits after forming an estate plan that touches on your farm.