Family farms and businesses can serve as a strong legacy, but you need a comprehensive succession plan to make sure these valuable assets pass to new owners. You should take steps to protect your farm and your family business when you wish to retire, if you become disabled, at the end of your life, and after your death. An attorney can help.
Randy Holmgren provides assistance to owners of farms and owners of family businesses in Salt Lake City and surrounding areas throughout Utah. We help you to understand the risks to the farm and the company and to take steps to limit the potential for loss so you can ensure the land and business will pass on to the next generation. To learn more about the personalized help we provide, give us a call at (801) 988-5877 or contact us online. We can also answer generation questions you may have including:
- Why is advanced planning important for farm and family business owners?
- What should be part of your asset protection & succession plan for your farm or company?
- How can a Salt Lake City farm and family business lawyer help you?
Why is Advanced Planning Important for Farm and Family Business Owners?
Farm owners throughout Utah have been faced with the devastating reality that they have to sell acreage after a death as a result of estate taxes. Business owners have also faced the same fate, with no option but to sell shares of the company, business assets, or even the company itself.
This tragic outcome happens because estate taxes can be assessed upon the death of the farm or business owner. Estate taxes are based on the value of property owned, and sometimes land or the company’s brand name can be worth so much that the estate is heavily taxed. For business and farm owners whose wealth lies in the land or business, there may not be cash available for estate taxes to be paid. Heirs will have no choice but to take a loan or to sell a part of the legacy that was left to them.
This can be avoided with advanced planning designed to protect the farm and family business. The farm or family business are also at risk from other possible sources of loss as well, such as:
- Mismanagement when the owner is incapacitated, if no plan has been put in place to allow a trusted person to take over right away.
- Mismanagement or uncertainty during the probate process after a death, unless steps have been taken to avoid probate.
- Irresponsible heirs who do not know how to manage the farm or company, or who lose their inheritance to bankruptcy, divorce, or creditor claims.
- Sale to pay for nursing home costs and medical expenses during the lifetime of the owner. This can happen because the farm or company count as resources for Medicaid and prevent the owner from qualifying for coverage. Medicaid is often the only insurer that covers nursing homes and certain other kinds of care, so without coverage, owners may have no choice but to liquidate property to pay nursing home bills.
These are just a few possible threats to the value of a farm or family business- all of which can be addressed using the right estate planning tools.
What Should Be Part of Your Asset Protection & Succession Plan for Your Farm or Company?
There are different ways in which you can ensure your assets are kept safe in case of creditor claims, bankruptcy, nursing home bills, irresponsible heirs, and other sources of threats.
There are also ways in which you can make certain your farm or business pass quickly to new owners. You need to get legal help deciding what legal tools are the right ones to use and making sure you comply with all legal formalities for taking advantage of those legal tools. Possible options include:
- Medicaid planning
- Long-term care insurance and life insurance
- Power of attorney
We can help you to use these and other legal tools that will keep your farm or business safe when used effectively.
How Can a Salt Lake City Farm or Family Business Lawyer Help You?
Randy Holmgren provides assistance to owners of companies and to owners of farms in Salt Lake City, Provo, Orem, Ogden, Park City, Cedar City, St. George, and surrounding areas throughout Utah. When you want to take smart steps towards keeping your company and land secure for your own life and for the life of the next generation, give us a call at (801) 988-5877 or contact us to find out how we can help you.