POWER DOCUMENTS

Although a will is the centrepiece of estate planning, these three documents should be addressed simultaneously:

• Will

• Power of attorney

• Critical care

Writing a will is often overlooked because there are so many other things that seem more pressing for the farm business. And let’s face it, a will represents mortality and who wants to think about that?

Like all aspects of transition, having the right attitude or mindset about the job makes all the difference. Think of a will as an empowering document that protects loved ones, business partners and the business itself. It provides control and peace of mind. It’s also one of the biggest gifts a farmer can give his or her family. Those are positive things.

WHO NEEDS A WILL?

Everyone involved in the farm should have a will. Start as a young adult at 19 or 20 to simplify updating it as earning potential and asset acquisition occurs.

All family members involved in the transition plan should have an up-to-date will. If employees have a stake in the business, encourage them to have a will as well.

HOW DO I CREATE A WILL?

The hardest part of any unpopular job is getting started. Sometimes, it helps to break it down into small steps. Call or email a lawyer to set up an appointment to start the process.

Don’t think about any of the uncomfortable details or decisions yet. Just get the ball rolling and make that appointment. Boom – that’s the first step. Your lawyer has probably done hundreds of wills and can walk everyone through the process. It doesn’t need to be done in one shot. Make the easy decisions first and chip away at it until it covers all the bases.

To prepare for that first meeting with a lawyer, compile a list of assets and start thinking about potential beneficiaries. Think through the issues that will complicate the will, such as second marriages, business arrangements, etc. Think about what you want to happen if something happens not only to you but to the entire family. Write the will based on the situation today, knowing it will need revisions as life and business evolve.

WHAT IS A WILL?

A will is a legal document that describes two main things:

• Who manages the estate after death

• How the estate is managed.

A will tells the provincial court who gets what and how to treat those assets. Every province has its own rules and legislation regarding estates and property distribution. Without a will, the province steps in and makes the decisions.

If you die without a will, the estate is carved up and given to your spouse and children according to pre-determined percentages. There’s no room for negotiation or nuance or any maneuvering to save tax or honour specific wishes.

The lawyer’s job is to ask the appropriate questions to ensure the will reflects your intentions. Their knowledge can help save money and stress during what can be an upsetting time. Forget about an online or mail-order will kit; this required a professional’s help. Ideally, work with a lawyer familiar with agriculture who knows about estate planning and tax law.

In addition to getting the details right, you also need to name an executor or personal representative to act on your behalf after you’ve died. The person selected may have to deal with the children's guardianship, probate fees, tax issues, competing or controversial creditors, and beneficiaries. In the short term, they’ll also maintain day-to-day business operations if necessary. This can be as simple as paying outstanding bills and making sure the staff is paid. It can get more involved depending on the farm business.

Put some thought into who should fulfill this role. Select someone who is decisive, can get the job done and is fair and impartial. Discuss everything with the executor to help them understand your wishes and act on your behalf.

It’s a good idea to name a couple of alternate options for executor. Circumstances change over time, and the first choice may be unwilling or unable to fulfill the responsibilities. Choose the executor wisely and review the decision regularly.

What is an estate plan?

A will takes care of the estate when you die. An estate plan can mean the transfer of wealth while you’re still alive.

A will should be updated every three to five years; more often if there are plans to keep accumulating assets or starting new enterprises. It’s a bit like an equipment insurance policy – you notify your agent if you buy or sell a piece of equipment to ensure you have the right coverage. The same goes for a will. If you buy or sell a farm or start a trucking company, you should be calling the lawyer to update the will. This is important for the transition plan and should reflect your transition intentions.

A will is one of the kindest things you can do for your family.

WHAT’S COVERED IN A WILL?

There are three big-ticket items covered in a will:

• Naming who will administer the assets of the deceased.

• Outlining who receives which assets.

• Expressing who will be the guardian of any children if death occurs when the children are still minors.