Frequently Asked Questions
How do I treat on-farm and non-farm children fairly?
First, recognize that fair treatment does not necessarily mean equal treatment. If farm business sustainability is a goal, on-farm heirs may have helped create that estate, perhaps earning below-market wage rates, despite working long hours in a high risk profession with the expectations of making up some of those earnings through receipt of assets later. Non-farm heirs may have left the farm to pursue family and education goals and may have already received part of their inheritance in the form of educational assistance and/or financial support. Farm heirs often share the goal of wanting the farm to stay in the family and may be responsible for caring for parents in their later years. Circumstances and goals change so parents should not presume that they know the feelings of either on-farm or non-farm children. Communications are key. See the Preparing to Transition, Treatment of Heirs section of this website for more information.
How much income will I need in retirement?
That's the $64,000 question, isn't it? How much income have you needed annually in
recent years? Kansas Farm Business Management Association data documents what farm
families are currently spending by age of oldest child. The old-rule-of-thumb was
that you might need 80% of what you spent before retirement, but rising health care
costs and other related expenses have called that notion into question. Financial
calculators built into software programs such as Quicken help you gain some insights
by pointing out the impact of life expectancy and inflation on the funds needed. Do
you plan to live differently in retirement, for example, travel more? Will asset transfers
as part of your estate plan reduce your ability to generate income from farm assets?
To answer the question about how much income you need, you will need to anticipate
both your lifestyle and expenses. See the Preparing to Transition section of this
website for additional references.
What happens if I don't have a will?
Without a will in Oklahoma, the transfer of your assets upon your death will be directed using the Oklahoma statutes of intestate succession. These statutes do not allow any room for flexibility to meet changing family circumstances or special needs. If you want to direct what property will transfer to your spouse, children and other potential heirs, you will need a will. Review the publication titled Trusts: Uses and Considerations for more information.
How can I minimize my estate taxes?
The desire to minimize estate taxes is often expressed when evaluating methods of transferring the estate. However, estate taxes are only a part of the overall estate settlement cost. Lawyers and accountant fees, probate and estate taxes make up the majority of estate settlement costs. Proper estate planning using a well written will or trust will help to minimize the total costs of settling your estate. See the publication titled Estate Planning: A Simplified Guide for Oklahoma Farm and Ranch Families for additional information.