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Estate planning is a good decisionBy Jennifer Bremer  Planning for what will happen to your farm and estate after you are gone is a difficult thing for some people to do, but it can be a very important step to preserve an agriculture heritage, according to Myron Friesen. Friesen, the owner of Farm Financial Strategies, Inc., based in Osage, Iowa, helps farmers and land owners develop strategies to manage their farm and pass it on to the next generation. "When working on estate planning there can be conflicts. It is important to know what those conflicts are and figure out how to deal with them," he told a group during the Commodity Classic in Anaheim, Calif., recently. Some farmers don't have an estate strategy, which can lead to problems because, Friesen said, it's important to have a continuing strategy when it comes to an estate. "Parents need to communicate with the rest of the family so the family knows what their wishes are, and that information is out in the open, from the very beginning," he said. "Increasing land prices have changed how people look at the land and what they want to do with land they may acquire." Friesen said it is important to get advice from people who are qualified to give advice about estates and understand all parts of estate planning, including insurance, taxes and dealing with people. "With the majority of land being owned by people over 55 years old, there will be a lot of changes that occur in the near future, and the next generation needs to know how important agriculture land is," he said. Friesen, a past FFA advisor with a deep love for agriculture, started his business to be able to help farmers pass the farm to the next generation. "My first thought was that most people have everything done when it comes to estate planning. However, very few families have things completely planned. No wonder the next generation is leaving the farm, while those who stay are struggling to see a profitable future in production agriculture," he said. Ownership determines distribution in an estate. Friesen said it is important to know the ownership in the estate and how it is set up, prior to the plan being made. Ownership examples would include: sole ownership, tenants in common, joint tenancy, corporation, or limited partnership. Life insurance ownership can affect the estate also. He said it is important to understand the guarantee from the insurance company. "It is important for each family to look at their particular situation in order to know what to use for their estate planning strategy," he said. Tax laws need to be understood and looked at to be sure that beneficiaries are getting what they should and not paying unnecessary taxes or taxes that could be avoided. Many people use estate tools like wills and trusts when estate planning. Without a will, the state decides who gets what. "A will is a written instruction to the executor and heirs. It is low cost and easy to establish and should periodically be updated," he said. Trusts can be utilized through a will, which is a testamentary trust. An intervivos trust is established while living. Friesen said making all these decisions isn't always easy but can make for an easier transition to the next generation, regardless of what the decision is. "Inheritance is a gift. Estate distribution does not have to be a negotiation process--it needs to be real. It is not a right that people are given, and a family meeting is not needed," he said. "How the estate is split up is the decision of the owner. "I had a client say to me once, 'if you decide not to decide, you just made a decision,'" Friesen added. "Make a good decision and have a plan." For more information on estate planning, visit www.farmestate.com. Jennifer Bremer can be reached by phone at 515-833-2120, or by e-mail at jbremer@hpj.com.
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