Creating a comprehensive estate plan can protect your interests and your family’s future. When you work hard to earn a living and obtain assets, it’s natural to want to pass them down to your children or dependents when you pass away.
Unfortunately, many people don’t understand how to keep their business and property intact when the unexpected happens. Estate planning isn’t only about distributing your assets to your surviving family when you die. You must also ensure your farm can continue to operate if you become incapacitated from an accident or illness.
Below are the steps you should take to preserve your legacy for the next generation.
Talk to Your Family
You should sit down with your family to discuss your hopes for the future. Your family business is a valuable asset, and you want it to be successful even after you’re gone.
Whether you plan to leave your business to your kids, spouse, or longtime friend, it’s critical to have an open and honest conversation with them. Inform them of your plans to include them in your estate and have them take over the business upon your death.
Be sure to listen to their concerns and answer their questions. Even though you built your business from the ground up, your kids might not want to take over when you’re gone. They might have other plans for their futures. It’s vital to consider their feelings and opinions and look for other successors if necessary.
Assess the Business
You should evaluate every aspect of your business, from the land holdings to the income and assets it earns. Operating a business after the owner passes requires knowing whether it is profitable and can continue to thrive.
You don’t want to leave your business to your spouse or children if it isn’t making money. Being in debt or not turning a profit each month means your family will inherit a failing business. Determining the value of your business before deciding how you want to divide ownership among your heirs when you die is essential.
Create the Necessary Documents
You need more than a last will and testament when you create an estate plan. When you’re a farmer you need various legal documents to protect the land, business, and other assets.
Creating a living trust allows you to transfer various assets into and out of the trust while you’re alive. Once you die, the successor trustee you’ve chosen would distribute those assets to your named beneficiaries without going through probate. It could give them the funds to pay for necessary expenses and keep their new business afloat.
Plan for Accidents
Estate plans should include legal documents for who will operate your farm if you can’t make sound decisions. For example, if a traumatic accident leaves you in a coma, someone should be able to take over for you.
You can appoint a power of attorney to manage your financial and business affairs if you can no longer speak for yourself. This person should understand the business and have the ability to make the same decisions you would make.
Contact a Minnesota Estate Planning Attorney
You should never draft an estate plan without the help of a Minnesota estate planning attorney. Whether you’re interested in executing a business succession plan, power of attorney, or living trust, let us do the hard work for you. We can review your business and determine the most effective options for protecting your farm. Simply contact us at (763) 244-2949 to get started.