With the average age of the American farmer now approaching 60 years, a large number of farmers will be retiring or transferring their farms in the next decade. As with any business, it is important to have a succession plan.

Over the next several articles, I will discuss the estate planning steps that farm families should take so as to ensure their family, financial, and farm goals are met.

We will start off discussing the basic estate planning documents. These consist of a simple will, living will, durable power of attorney, and health care representative. I can’t stress enough how important these documents are.

Sadly, a large majority of farmers either have these documents, but they are out of date, or do not have them at all.
Simple Will: This document is essential to provide who will receive your assets, ensures your funeral expenses and debts are paid, designates who will care for minor children, and makes sure other wishes are granted.

There is a saying in the law that “If you don’t write a will, the State has written one for you”. This means that the state you live in probably has predetermined who will take ownership of your assets if you die without a will.

Often, it will depend upon if your spouse is still living, if you have children, or if your parents are still living. If you die without any heirs, usually the State will end up with your assets.

Living Will: A living will usually designate whether you desire to have artificial life support (ALS) rendered to you if you are unable to speak for yourself.  Generally, a person can designate that they desire ALS, that they do not, or they will leave that decision up to their health care representative.

Durable Power of Attorney: This document appoints someone to handle your assets if you become incapacitated. At a minimum, a power of attorney should include the power to: manage and transfer all assets, deal with the IRS, make gifts on your behalf, and create and amend any trusts you set up.

Health Care Representative: This authorizes another person to make health care decisions for you if you are unable to make informed health care decisions for yourself.

Examples of such decisions are making arrangements with hospitals, health care facilities, nursing homes or other institutional care or health care providers, as well as consenting or refusing health care in accordance with your living will declaration.
As farmers, we work in one of the most dangerous occupations.  A serious injury, or death, can occur at almost anytime.  Thus, I always advise clients that having the above stated documents will help ensure their goals are met if the unexpected occurs. A little planning now will go a long way in the future.

John J. Schwarz, II, is a farmer and attorney in Steuben County, Ind. He focuses his practice on agricultural law and legal issues important to farming communities. He can be reached at 260-665-9779 or jschwarz@cresslaw.com
These articles are for general informational purposes only. If you have a specific legal question, you should consult an attorney.