Down On The Farm: Estate Planning Attorneys For Farmers In Loveland
Here at Ores Law, we’re passionate about helping farm families with estate planning. While estate planning is important for everyone, it’s incredibly crucial for farmers. As estate planning attorneys in Loveland, we often sit down with farming clients who are completely confused by the estate planning process. A lot of this misunderstanding comes from overhearing inaccurate information from their neighbor down the road.
Today, we’re going to explore a couple common examples of mistakes farmers make when estate planning in Loveland.
Two Common Estate Planning Mistakes Farmers Make In Loveland
Giving away the remainder interest, but holding on to the life estate in order to retain an income stream and control of the farm.
If you’re only trying to avoid probate administration, that’s what you’ll be doing with this plan. However, when you retain interests such as the example above, you risk causing 100 percent of the value of the gross estate to be included in Federal Estate taxes upon the event of death of the life estate holder. If you’re trying to minimize death taxes, this is not a good plan.
Titling the property jointly with the children and spouse so that upon your death, everything automatically transfers to them.
This does avoid probate once again. However, if your child who inherited the farm gets a divorce in the future, it puts your farm at risk of being in the middle of a marital estate feud. While we know that you love your children, but passing outright ownership of the farm and all farm assets to your children could make your farm the subject of creditor claims, division by a divorce court, or worse. If you really want to keep the integrity of your farm intact and within the family, we suggest putting your child’s inheritance in a trust.
Estate planning for farming families can be complicated and confusing. Call the Loveland estate planning attorneys at Ores Law today, and let us help.