Ranchers and farmers in Texas know that ranching is much more than a career path. It is often a way to protect a generations-long family legacy of providing a blue-collar living for a family. What many ranchers may not realize is the importance of creating an estate plan that will protect their properties from becoming another shopping center or other commercial lot should they become incapacitated or die unexpectedly. There are many estate planning mistakes to avoid, some of which are specific to farmers and ranchers.
Failing to plan is planning to fail
The estate plan of farmers and ranchers come with their own unique requirements. The estate plans of these individuals must specify who is to receive the land involved, the equipment, the livestock, and everything else that pertains to the farm or ranch. Not creating a plan that addresses all these issues can lead to a farm or ranch being tied up in litigation and ultimately failing as a result.
Overreliance on joint accounts
Many believe that creating joint accounts is a way to ensure that a farm or ranch is left in the position to survive financially. However, this process can lead to subsidies being left on the table while control of the land and business are also essentially being forfeited. The presence of joint accounts may eliminate the probate process, but it can also have serious tax ramifications.
Farmers must take the time to consider the expenses of their death or incapacitation. The failure to do so may leave the heirs of an estate in a position to be forced to sell the land, equipment and other assets as all these assets are considered illiquid.
Ranchers and farmers who are beginning the estate planning process should contact an attorney who is familiar with the concept. A lawyer can help his or her client review his or her assets and create a legally binding plan that ensures the long-term success of a farm or ranch.