Don’t wait to plan: it might be too late

How many times have we heard about the death of a farmer who had no will and the farm was sold to pay off the several children — and the son who had farmed with the expectation of owning the farm one day was left with but one share and couldn’t afford to buy the other shares?

Or, the farm family who did not have an estate plan and ended up with a family  dispute over the farm assets?

Or even the several generation farm with assets and liabilities that took years to unravel after the parents' deaths?

Estate planning often ignored

Not uncommon are situations that have resulted in big legal bills and hard feelings and even the demise of the farm. In the past few years, many newspaper, magazine and social media stories have dwelt on the subject of estate planning and most are ignored or put aside until “later.”

Last week this column told of the Schultz family: Keven and Cheryl and children Kari, Nick and Katy who milk 400 cows on 2,000 acres at Fox Lake. The children now own many of the cows and much of the farmland as the result of some serious long term planning. Part of that planning included services of an attorney — a young women who was raised on a Missouri dairy farm who Keven and Cheryl  and Kari had heard speak at a Badgerland farm credit meeting some years prior.

“On the ball”

“We had met with several other lawyers prior,” Cheryl says. "But didn’t feel they really were familiar with the dairy business and weren’t for us. We were impressed by Shayna Borakove (the speaker) who was right on the ball and understood so we had her help us with our plan." 

“Our plan was to not leave a  bunch of gobbledygook for our kids when we died,” Cheryl says. “I’d been looking for estate planning information for years and Shayna helped us put it together.”

I called Ms. Borakove wondering if she would take time to explain (to me) a bit about farmer estate planning that even I and readers would understand. A bit surprising to me was her suggestion of meeting the next day at her office and she’d tell me how she works with farmers.

A dairy girl

“I grew up on a Missouri dairy farm,” she began. ‘So, I knew the long hours, hard work and family involvement. But, I always wanted to be a lawyer and graduated from Law School in Boston where I worked as an insurance defense litigator for several  years.”  

In 2007, Borakove moved to Madison where, after a term working with another law firm, she opened her own law firm: Borakove Osman LLC (608-828-4880 and www.borakoveosman.com) specializing in estate planning. 

“I wanted to get into estate planning,” she says. “I knew I wanted to fight for the family farm and that it was better to plan for the future than to try and fix the past.  I talked with my father and grandfather about our farm succession plans and they had no solid thoughts. We had a family meeting, drew up some plans and I did the legal work,” Shayna says. “Seven months later grand dad died and my father is still farming.”

Helping families

“Our practice is dedicated to helping families and individuals with their estate planning, elder planning, estate administration, asset protection, and business continuation planning needs,” she says. 

First step

“The first step is getting acquainted: I use a questionnaire,” Borakove says. "It’s an inventory of the family and the farm. It’s a way  to collect their thoughts and educate me.”  

"Early on we have a meeting where the family can talk and get to know me," she continues. "As a former dairy farm girl and as a small, soft spoken and non-threatening women, we usually have a great conversation. It’s a chat that is sort of a story based approach where we try to separate the issues, list concerns, fix goals, determine the documents they may need and what tools I can provide to get them where they want to go. It’s not yet about making decisions — at that point they don’t know what decisions they can  make."  

The whole picture

“We want the family to be organized and look at the process in a non-emotional manner,” Shayna continues. “I try to see the whole picture and form a plan that is digestible and one that they know they can handle.”

The final result is a written plan, often centered around a revocable living trust, with the various power of attorney documents and an explanation of how they all work together to achieve their goals, Borakove says. 

How they did it

Kari Schultz Gribble, CFO of Tri-Fecta Farms explained the process as they did it.

“We originally heard Shayna Borakove speak on ‘Farm Succession' at a  Badgerland Financial Services (now Compeer) meeting and were impressed. We contacted her and she sent us a questionnaire that my parents and I filled out and sent back.

"About a month later we three met with her at her office in Madison and got to know each other. We walked through the questionnaire item by item. We discussed various possibilities and clarified the directions we wanted to go. Anything we didn’t understand was discussed and cleared up. We heard some of the ideas she presented and added some of ours." 

Had a plan

"Later, after we had talked things over at home, we met again at her office and discussed the proposal she had prepared,"  Kari said. "We then signed the needed documents and had our plan." 

Cheryl Schultz said, “We had an open and honest conversation and after it was all done, I felt so relieved that we had a plan for the future.”

What about the cost?  

We knew that from the beginning and looked at it as an investment,” Kari Gribble says. “When you consider possible taxes you might not know about and the attorney fees you might need to pay later, it’s a good deal.”

Experience tells us that every farm family is different and that many families have not seriously thought about the future. Every family should have a plan that covers the situation after the farm owner(s) die. And, that plan should be well thought out, written and legal. Even the simplest items should be covered.

For instance: My wife had a small savings account I was unaware of when she died several years ago. The bank couldn’t (by law) give me any details and I had to get authorization from the circuit court to prove who I was.

That was a rather simple challenge to solve and did not involve a lot of money, nothing like a $1 million, or $5 million or $10 million farm. 

Finding the attorney

How do you find an attorney? I’m not exactly sure — it’s sort of like buying a new car. Look, ask, listen, interview, and change if you’re not satisfied. And do it before you need one.

John Oncken is owner of Oncken Communications. He can be reached at 608-222-0624, or e-mail him at jfodairy2@gmail.com.