December 07, 2023

Estate planning puzzle: Continue to develop farm family plans over time

CHAMPAIGN, Ill. — Estate planning requires more than writing a will.

“A last will and testament is one piece of the puzzle,” said Cari Rincker, owner of Rincker Law, PLLC.

“I feel that people think that estate planning is only for people that are old, people that have kids or people that have a lot of money,” Rincker said during a Farm Estate, Succession and Business Planning webinar organized by the Illinois Agri-Women.

“Pretty much everybody over 18 needs at least a simple will,” she said. “For those that own property or have children, they should consider additional steps to a simple will and it can happen over stages and massaged over time.”

Estate, business and succession planning are separate, yet they overlap.

Along with the will, estate planning includes advanced directives such as power of attorney for medical and property and it may include a living will.

“Your will says who gets what when you die,” Rincker said. “A separate personal property memoranda can include things like pieces of jewelry or paintings that go to someone specific and you can update this as many times as you want.”

The will also states the executor of the estate.

“I recommend you go three levels deep and include who is going to be the guardian of your children,” Rincker said.

“A will needs to be executed by two disinterested witnesses and now we can execute wills via Zoom,” she said. “So, don’t let the pandemic be an excuse for putting this off any longer.”

Two kinds of trusts can be used for estate planning — a revocable trust can be modified and an irrevocable trust is not modifiable.

“A common mistake people make is they come to me to create a trust and then they don’t move anything into the trust,” Rincker said. “If you want the trust to hold farmland, you have to quick claim the land from you to the trust with a simple deed. If you want to move the land out of the trust, you re-deed the property.”

To set up a business plan for farms many are either sole proprietorship or a general partnership, Rincker said.

“Farms have a lot of risk” she said. “There could be a fire, an injury of a farm worker or someone could get killed. People in agriculture need to be smarter about a liability shield to protect their assets.”

A limited liability company is a hybrid between a corporation and a partnership. In addition to a C-Corp or an S-Corp, farms may choose to set up a Series LLC.

“With a Series LLC you form multiple business entities and in Illinois there is a $750 filling fee and then each sub entity costs $50,” Rincker said. “But the downside is a lot of banks don’t do accounts for Series LLCs.”

Rincker encourages the use of prenuptial agreements.

“Prenuptials in agriculture should stop being taboo and they need to be part of a farm business plan,” she said. “Divorce is one of the big Ds that hurts family farms along with death and destruction.”

Succession planning is different than estate planning, Rincker said.

“It is more about how you are going to pass a farm from one generation to the next,” she said.

The priorities for farms may shift over time.

“I have some farms where the federal farm programs are the No. 1 priority, so I’m going to have different advice for the business entity they should form and it might be more advantageous to form a general partnership versus a limited liability company,” Rincker said. “If the goal is limitation of liability, I’m going to shift the conversation and talk about LLCs or corporations.”

All farm families should set a deadline for developing a plan for their operation.

“Put it on the calendar,” Rincker said. “I think there’s an estate plan that can fit into anybody’s budget, and once you get it in place, I recommend reviewing your plan every three to five years.”

A team effort is a good way to develop an estate plan.

“You should work with your attorney, financial adviser and accountant,” Rincker said. “This is not the time to find forms off the internet because there could be defects in how the documents are drafted.”

Since every farm family is different, Rincker said, there’s no one right time for a conversation about estate and succession planning.

“The holiday season may be a good time because off farm heirs are back for the holidays,” she said. “But make it an ongoing conversation and if you have trouble consider mediation with a neutral third party to help you have a discussion.”

For more information about farm estate, succession and business planning, go to