LLOYDMINSTER — Bob Tosh doesn’t have a one-size-fits-all solution for estate planning, but he says the most important thing farmers can do is involve every family member in discussions.
When everyone is at the table, he said, there will be no surprises when the will is read.
“Divide your assets however you want, but I recommend you have a conversation with your family,” said Tosh, a family business adviser with MNP, during his presentation at Agri-Visions in Lloydminster Feb. 14.
“Allow your family members to have a voice, allow them to express their opinion and give them a fair process. They might not be happy but at least they aren’t going to be surprised.”
Tosh said many people don’t have these conversations because they can be difficult.
But by having everyone at the table, he said, family members don’t need to assume or guess what their future on the farm will be.
“It gives you an opportunity to deal with the issue while you’re still alive,” he said.
“The only thing we are going to leave is a legacy. Most people don’t want to leave their families in disarray. They want to leave a good legacy.”
He said wills essentially formalize everyone’s expectations.
He recommended farmers write a will if they haven’t already, reviewing them every three years to ensure they are correct.
Make sure it’s made clear that everyone knows what they are getting, he added.
“Do the math. It helps you understand what your will says and that you understand the differences in what some children are getting over others.”
He said it’s important to understand that gifting assets work differently when a farm is incorporated.
For instance, he said, farmers can’t gift land when incorporated. They can only gift shares.
“People often don’t understand the responsibilities of share ownership, what they are inheriting or the rules.”
He said farmers can gift land if they are personal assets.
As well, he added, it’s crucial to know taxation rules when transitioning the farm.
Tosh said tax deferrals might not apply if the farm is transitioned to a non-direct family member, like a niece or nephew.
“If we miss the qualification, the tax can be substantial.”
Tosh said families have benefited by having estate planning conversations beforehand. Usually, he said, most non-farming kids just want a place to come home to when their parents pass away.
“Most non-farming kids aren’t entitled. We want everyone to have a voice, expressing their viewpoint at the table.”
While many families are able to work through potential conflicts smoothly, those who resort to physical violence will need professional mediation, he said.
“Before we walk in with any planning, we need to bring people out of that conflict situation,” he said. “We need everyone thinking clearly.”