GREAT FALLS — Transferring your assets to the next generation is one that takes a lot of planning, yet many don't start the planning process until they reach an older age.
This is no different in the farm and ranch community. A complicated process and plenty to take into account ranging from land to equipment.
According to the U.S. Department of Agriculture, The average age of farm producers increased from 56.3 to 57.5 years in a five-year span, from 2012 to 2017. https://www.usda.gov/media/blog/2023/02/22/2022-census-agriculture-impacts-next-generations-farmers
Attorney Keith Tokerud from Montana Estate Lawyers, P.C. explained what most people tend to overlook when planning their estates.
"Family disputes," he said. "It's raised its ugly head in just the families that you least expect it to. I think it really needs to be something that we look at to make sure we're going to minimize the chances of problems, particularly in farm and ranch. We have one farm and ranch and the family that we have four or five different kids, and all of them have an emotional attachment to it. It could be a source of a lot of issues if we don't work around that and then share whatever planning we've done with the family, so they're not surprised when mom and dad passed away and all of a sudden, they thought they were going to get something, and it turns out they're not.
Tokerud said the process of estate planning has changed over the years, which means it has also changed the ways he works with clients in preparing them to smoothly transition their farms and ranches.
"We used to think our job was to sit down with people, spend a few minutes with them, find out what their goals are, have them come back in in a week or two and prepare a document that's maybe three or four pages long and send them on their way," Tokerud said. "We realize that it's not the best kind of process for doing estate planning. So now, at least in our office, we take the time to really get to know the family, find out the issues, understand what's going on economically with the farm, for instance, is this really a viable operation? We've got two boys on the farm. Is it going to work out for them and their families both to stay on the farm? We're going to get way more into the details of the situation so that we can minimize the chance of disputes, but maximize the chance the farm will stay in the family."
Each year, Tokerud partners with 'Pathwise Group', a consulting firm, in hosting seminars across Montana to help farmers and ranchers prepare as well as to encourage them to start the process early rather than later.
Pathwise Group Founder, Jared Brown said, "there is no perfect estate plan. We always say just forming one is the right next step. Everybody has an estate, and everybody has something to take care of. Everybody thinks estate planning is only four very large operations that maybe have several corporations and things like that. It's not. It's about you sitting down and having intent about how things will happen if something were to happen to you.
Brown added, "With some of the changes coming up in 2025, it's pivotal. We're trying to be as proactive as possible. We'll talk a lot about the law, changes in the estate planning and the tax scenario, and it's really, really important stuff to be proactive, have enough time to make the proper decisions and go from there."
Brown added that it seems as though it's become more of a topic of conversation in the farm and ranch community, noting the impacts that Covid has placed along with demographics in terms of age.
"It's really structures of what you want to happen with the land," Brown stated. "What you want to happen with the operation, and without being guided, the family that's left is trying to make decisions based on what they think you wanted to have happened. A lot of times, people don't have Thanksgiving anymore. They don't sit down together and have dinner anymore because it turns into a big fight ... Anybody that does this for the right reason is to get people to still become a family and stay a family to move things forward. The generation and the legacy is really important."
Two Farm and Ranch Seminars will be hosted:
- November 1st - Yogo Inn (Lewistown) 9am-12pm
- November 2nd - Grand Union Hotel (Fort Benton) 9am-12pm
To learn more about the seminars, and how to register, click here: https://pathwisegroup.com/farmandranch/
