Getting Ready to Meet with Farm Succession and Estate Planning Professionals

The Cultivating Your Farm’s Future Workbook for Farm Succession Planning in Wisconsin is an incredible resource to help your family plan for the transition of your farm to the next generation. Each section of the workbook is designed to help you have thoughtful family discussions about the future of the farm and how to best prepare the next generation to take over the complete management of the farm.

Additionally, these worksheets can be used to develop resource notebooks that can be used as you meet with professional advisors as well as by your family as they execute your estate upon your death. So, let’s take a closer look at these notebooks.

Succession and Estate Notebook

The first notebook to develop is a succession and estate notebook. This notebook should include copies of the documents that your attorney and other financial and tax professionals will need to review as they help craft your plan. I would recommend getting a large three-ring binder and purchasing protective sheets that you can put inside the binder to place each document.

So, what documents should be placed in this notebook? Essentially, you will need to provide an accounting of all your assets and liabilities. For instance, if you own a 100-acre crop field, your attorney will need to see the deed and how it is titled. Having this documentation will help your professionals to develop a balance sheet for your estate as well as to review how each asset is owned, titled, and who will inherit each. Your attorney will also need to examine which of your assets have (or need to have) transferrable on death (TOD) or payable on death (POD) designations.

Key Documents to Include:

  • Family Information – Include a detailed list of your family. Include spouses, children (step, adopted), and grandchildren. Include other names of persons who should be accounted for in your estate plan.
  • Legal paperwork – Include copies of existing legal documents such as power of health care attorney, living will, financial power of attorney, will, trust, and business entity documentation including any operating agreements. Note that some of these documents may not be in place already and will need to be written as you meet with your attorney. Include any divorce or property settlement orders. Include any pre- or post-nuptial agreements that are in place. You can also include end-of-life planning documents (i.e., funeral planning).
  • Tax paperwork – Include copies of any previously filed federal gift tax return forms.
  • Real estate documents – Include copies of the deeds for your home (primary and secondary), rental properties, and farmland. Also include deeds for property owned by a business entity that you have financial stake in. Include copies of any mortgages. Also include copies of any legal easements or leases (land, oil and gas, solar, carbon) that are in place.
  • Financial accounts – Include copies of the recent account statements for your checking and savings accounts. Include business accounts.
  • Investment accounts – Include copies of retirement accounts, pension accounts, mutual funds, stocks, bonds, and other investment accounts.
  • Insurance – Include any insurance policies you have. This includes life insurance policies, car vehicle insurance, farm insurance, disability, long-term care insurance, and home insurance.
  • Credit cards – Include a copy of a recent account statement.
  • Farm asset list – Include a list of equipment, machinery, and livestock. It is recommended to include a copy of the current depreciation schedule for these assets. Also include an inventory of grain and other ag commodities in storage.
  • Personal asset list – Many of our personal assets are not titled. It is a good idea to include a list of personal assets such as computers, antiques, jewelry, books, tools, and special collections that you own. You may want to list who you wish to inherit each.


Liabilities – Provide a listing of loans and other outstanding debts.

Additional items that can be included in this notebook include the account login and password for each account that you may have. It is also nice to include a list of your advisors and their corresponding contact information. This should include advisors such as attorney, lender, financial advisor, tax preparer, insurance agent, crop consultant, veterinarian, farm financial consultant, and other key advisors. It is also a great idea to include a listing of where important paperwork is located (if not included in your notebook).

Selecting Professional Advisors

Once you have your notebook compiled, it is time to engage legal and financial professionals to help you craft your succession and estate plans. If you do not have an attorney, financial advisor, or tax specialist, you will need to take time to research professionals.

So, what should you look for in professionals? First and foremost, you will want to work with professionals who you can trust, who understand the complexity of farm estates, and who will work to create a plan that fits your family. Unfortunately, there are some professionals who use a cookie cutter or a one size fits all approach. It is important that you interview these professionals to make sure they are a good fit. Remember, you do not have to hire the first lawyer you consult.

Section 3 of the Cultivating Your Farm’s Future Workbook includes questions that you should ask as you interview potential service providers. Use the worksheets to evaluate their services and how they match with your needs. Most professionals provide a free initial consultation for you to get to know them and the services they provide better. It is also a great idea to seek recommendations from friends, family members, or neighbors. Ask why they liked the professional and if they were happy with their work. You can also ask other service professionals for recommendations. You can also reach out to your local extension office personnel as your state farm management team may have a list of attorneys and other professionals who specialize in farm estates.

Potential Interview Questions:

  1. What are your qualifications/credentials/training?
  2. Do you work specifically with business succession and estate planning for farm families?
  3. What continuing education have you participated in on this topic?
  4. What will this service cost? What is the fee structure? Is it per hour or a flat fee for a finished plan?
  5. Do you provide a free initial consult? If yes, how long is that meeting? Thirty minutes, an hour, unlimited?
  6. Who in your firm will work on my behalf? Will you pass this task to a junior associate or paralegal or another person in your business?
  7. How will we communicate and how often? By phone, email, or office visit? Will we communicate weekly or monthly?
  8. How many of these documents have you drafted in the past?
  9. Can you share names of other clients with similar needs that I might interview? (Note: professionals may need permission or decline due to confidentiality).
  10. How long will it take this work to be completed?
  11. What information or documents will I need to bring to the first meeting to make our time most efficient?
  12. Do you require meeting in your office? Or are you willing to travel for meetings?


As you visit with the professionals, be specific about what type of services you need. Many professionals will specialize in a specific area. Remember you would not go to an eye doctor and ask them to do an open-heart surgery! So, make sure your professionals have experience in agricultural law. After meeting/interviewing the service professional, you should evaluate the ease you experienced while talking with them. You should feel comfortable and respected when working in a close and confidential relationship with the professional.

Farm Resource Book

In addition to the succession and estate planning notebook, I also recommend developing a farm resource book. This notebook includes maps, pictures, and measurements of where all the different water, electric, drainage and septic lines are. I personally found out where the underground electric line at the farm was the hard way! Yep, we hit it with a backhoe digging up a waterline. The location of this electric line was one thing I was not able to learn from my dad before he passed. After all, we never had a problem with it, so we never discussed it.

You can also include tile maps for the farm as well as specifics on the history of the barns, farm equipment, and water wells. Also include existing crop leases, utility easements or leases, USDA Farm Service Agency or Natural Resources Conservation Service paperwork, and copies of any natural resource lease (solar, carbon, oil, and gas leases).

Encouragement

While it takes an incredible amount of time to review each worksheet and develop your two notebooks, know the work that you are doing today will serve as a blessing for the next generation. Follow the old adage: Plan your work and then work your plan.

References

Cultivating Your Farm’s Future – A Workbook for Farm Succession Planning in Wisconsin. Joy Kirkpatrick, Editor. University of Wisconsin– Madison Division of Extension. Available here

David Marrison, Getting Your Farm and Family Affairs in Order. Available on request. Marrison.2@osu.edu or farmoffice.osu.edu

Melissa O’Rourke, Evaluating Your Estate Plan: Estate Planning Attorneys: Finding One Who Can Work for You. Ag Decision Maker. Iowa State University Extension and Outreach. File C4-61. April 2012.

Allan Vyhnalek, Preparing for Farm and Ranch Succession: How You Select a Layer. Nebraska Center for Agricultural Profitability. Available here

Workbook Worksheets to Get Started:

  • List of Advisors and Important Documentation, pp. 18–22
  • Personal Net Worth Calculation Worksheet, p. 13
  • Interviewing Professionals for Farm Succession Planning, pp. 54-56

Reflection:

  • How are you going to set aside time to find and organize your succession and estate planning documents?
  • Can you set aside a specific hour or two every month, for example: the third Thursday at 8:00 a.m.?
  • Can you develop a checklist of what you need?

Author Bio

David L. Marrison, Professor and Field Specialist, Farm Management, The Ohio State University