Is Your Estate Plan Keeping Up with Life's Changes? Here's What to Do

Life evolves, and so should your estate plan. For individuals managing farms, ranches, or family businesses, outdated trusts and estate plans can fail to address today’s needs and priorities. Adding to the challenge, adult children may not always agree with plans made years ago.

A recent article from Successful Farming, “How to Handle an Outdated Estate Plan,” highlights the importance of revisiting estate plans regularly. Whether the goal is to keep the farm in the family, sell it to fund retirement or explore another path, keeping your estate plan current is essential to protecting your legacy and achieving your goals.

Where to Begin

The first step is a consultation with an estate planning attorney experienced in handling family businesses and agricultural estates. These professionals can offer an objective perspective and guide you through updating your plan.

Here’s what to expect during the process:

1. Inventory of Assets: Start by creating a detailed list of the family’s assets, including property, business interests, and other valuables.
2. Clarifying Family Goals: Determine what’s next—whether it’s maintaining the family business, selling assets, or passing everything to heirs.
3. Reviewing Existing Plans: Examine the original estate plan to assess its relevance and make necessary adjustments.

Updating Trusts

The type of trust you have plays a crucial role in your estate planning updates:

• Revocable Trusts: These are easier to amend or restate. An estate planning attorney can update the provisions to align with your current objectives.
• Irrevocable Trusts: If adjustments are required, your attorney may need to decant the trust, transferring its assets into a new trust, depending on state laws.

Revisiting Ownership and Policies

• Ownership Entities: If the original plan created ownership entities like LLCs, review the operating agreements. Parents with controlling interests can modify these agreements to establish centralized management or an exit strategy.
• Life Insurance Policies: Check for expiring policies and explore whether they can be replaced with better options. Cash value policies could help fund buyouts, expand operations, or balance assets among heirs.

Accounting for Land Value and Assets

Land values and property assets often fluctuate. Periodically review valuations to ensure that purchase prices and funding strategies remain accurate. Consider setting a fixed or maximum price for specific assets to streamline future transactions.

Building Consensus Among Family Members

One of the toughest challenges is aligning children with their parents’ estate plans. Open communication is critical. Hosting a family meeting with advisors—such as an estate planning attorney, accountant, and financial advisor—can foster understanding and collaboration.

Non-family advisors can bring objectivity to the conversation, helping to remove emotions and focus on long-term benefits for everyone involved. This inclusive approach empowers the next generation to feel confident in their roles and responsibilities.

The Risks of Delay

Failing to update an outdated estate plan can jeopardize the future of your family business. Without a clear succession or estate plan, families may be forced to sell thriving enterprises due to unresolved legal or financial issues.

At The Werner Law Firm, we specialize in crafting and updating estate plans for families managing farms, ranches, and family businesses. Our experienced trust attorneys can help you adapt your plan to reflect life’s changes and ensure your legacy is secure for the next generation

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: Successful Farming (Nov. 7, 2024) “How to Handle an Outdated Estate Plan”