If you own a farm, then there’s a good chance that it’s been in your family for decades, perhaps even generations. And you probably want to keep it that way. If so, then you need to carefully engage in estate planning in a way that ensures that your wishes come to fruition. That might sound simple enough, and it might feel like you don’t even need an estate plan, especially if you’re just hoping to leave the farm to your spouse and/or your children. But foregoing an estate plan is a dangerous proposition, especially if you’re in a blended family.
Estate planning in a blended family
If you’re in a blended family, then you probably love your spouse’s children like they’re your own. But does that hold true when you think about how your farm is going to be passed on? Maybe. Maybe not. The problem of foregoing an estate plan in these circumstances is that state law will dictate how your assets, including your farm, are passed down, meaning you lose all control. Under Ohio law, your spouse will inherit everything if you don’t have any children, or you have children with that spouse and no other children. If you have children from another individual, though, then your spouse will inherit the first $20,000 of your estate and then half of what remains. Your children from your previous relationship will then inherit everything else.
That might not sound so bad, but you have to think long-term. If your spouse inherits a significant portion of your estate, then he or she is able to do whatever he or she wants with it moving forward, including leaving it to his or her children, thereby cutting your children from a previous relationship out of the picture. This can leave your children, and perhaps even your grandchildren, without the financial resources you intended them to have.
How to address estate planning in a blended family
Fortunately, there are steps that you can take to protect your and your children’s interests in a blended family. One option at your disposal is to utilize a remainder trust. Here, you leave a specified amount of assets to your spouse with payments being made on a periodic basis. The trust further specifies that once your spouse passes away, anything remaining in the trust is diverted to another named beneficiary. This could include your children or your grandchildren.
Another way to deal with estate planning in a blended family is to simply leave your assets directly to those who you want to inherit. You can do so without any contingencies, or you can place conditions on the release of trust assets, such as graduation from college, the completion of financial planning classes, or marriage. You have a lot of options here.
What are you willing to do to protect your farm?
There’s a lot of value tied up in your farm, both financial and sentimental. You should protect it at all costs, ensuring that it is passed down from generation to generation in a way that you see fit. That’s going to require sound estate planning, though, so you can’t just sit back and expect that everything is going to fall into place. You’ll have to be proactive in learning your estate planning options and acting on them in an effective manner. If you’d like to learn more about how to go about doing that, then we encourage you to continue reading about estate planning as it pertains to farms and asking the questions that you need to feel comfortable moving forward.