Getting your financial house in order

Family farmers at a crossroads

The largest exchange of wealth in world history is occurring as the aging make final decisions about their legacy. But, with the possible return of the death tax and the changing future of farming in California, which road should be taken? Ag Alert® delves more deeply into this important and timely topic:

• Part 1: Legacy Lost
  • $26 trillion at stake: Passing on assets requires good planning
  • Commentary: Lending a hand--when it's time to hand down the family farm
  • Estate and succession planning
  • U.S. Senate may skirt full repeal of death tax this week
• Part 2: Redefining tradition
  • Family farmers face elevated retirement risks
  • Planned giving plays a role in estate plans
  • Senate fails to find votes to end the death tax
  • Families talk about living through the death tax
• Part 3: Branching Out
  • Getting your financial house in order
  • Commentary: Plan now to ensure the family farm surives for generations
• Part 4: A living legacy
  • What are the benefits of conservation easements?
  • How popular are conservation easements?
  • Al Montna's thoughts on estate planning

Financial planners can be a real asset when it comes to reaching business goals, said Link Leavens, a manager of Leavens Ranches in Ventura County.

"It's reasonable to expect these experts will know when information or consultation is needed from professionals in other disciplines," he said. "Even though paperwork isn't a farmer's greatest love, time spent developing a good financial plan for farm and family is important."

Developing a long-range succession plan is a discovery of sorts, Leavens said, noting his family's own experience.

"We looked at ourselves to determine what we really wanted in the future," he said. "That took a great deal of time and introspection."

Having financial management tools ready helps a family run the company and avoid some farming pitfalls, Leavens continued. "But they can't tell you how to farm and they can't tell you what's right for your family in the future."

Tools offered by financial planning professionals should be able to help with:

• Assessing relevant financial information, such as tax returns, investments, retirement programs, your will and insurance policies.
• Reviewing balance sheets, examining cash flow and debt structure, and making appropriate recommendations.
• Identifying financial areas that may need attention, such as building retirement income, improving investment returns, fine-tuning insurance needs or making tax-saving suggestions.
• Helping decide on a financial plan based on personal/financial goals and investment risk levels by systematically determining several possible options.
• Providing a clearly written financial plan and thorough discussion of the details to ensure comfort with it.
• Helping implement financial plans, including collaboration with other specialists on the business advisory team, such as lenders, lawyers, succession planners or accountants.
• Reviewing the farm or ranch's situation and financial plan periodically and suggesting options to improve the plan when needed.
• Providing monthly or quarterly statements indicating the condition and performance, including how much it's worth, past transactions and average rates of return for the period.