How to have family conversations about estate planning

Family decisions about inheritance, money and business leadership are never easy and can sometimes be awkward. However, these are extremely important conversations to have with your children or heirs to ensure your wishes for your farm and business are followed.

Don’t wait on your heirs to bring up this discussion. This is one of the times you need to take the reins and initiate an in-person conversation. To help the dialog get flowing, you may want to start at the end and discuss your wishes for your funeral and then move into asset division. You may also ask your financial planner or lender to attend; they can also help you start the conversation.

Before this exchange, think of each of your children, their personalities and interests. Ask yourself questions like:

• Are they all interested in the family farm?

• Are they currently part of the farm’s operations?

• Is one better with business matters than others?

• Will they follow your wishes for family farm preservation?

You never want to create an unnecessary burden or obligation on children with no in-terest in the property. Your heir(s) should see the estate as an opportunity to continue the family business, not an obligation. At this point, you may need to start sharing in-formation about your farm and its profitability with your heir(s), if you have not already done so. Moving forward, they will need to know where the farm financially stands.

These conversations can put you in a tough position. Some of your heirs may feel like they are getting shortchanged, even if they have no interest in farming or running a business. Be realistic and clear about your wishes and empathetic to your children/heirs. Remember they need to be treated fairly and not necessarily equally. Those not wanting to farm may be given non-farm assets, life insurance proceeds or off-farm investments. Realize that you may not be able to achieve equality in some situations.

Always put your wishes in writing, and have an attorney prepare a will or an estate plan. Dying without these documents could put your successful farm transition in jeopardy. While a will may seem like a final step, it should not be. Revisit it every few years. People change, circumstances change, and sometimes a child with no interest in farming five or 10 years ago may suddenly express an interest.

Clearly stating your wishes to your family members can help prevent family disputes after you leave. For more information on estate planning, contact the Trimble County office of the University of Kentucky Cooperative Extension Service.

Source: Steve Isaacs, UK agricultural economist