Farm Insurance Agents & the Estate Planning Alphabet of Doom!

Successful farmers see their hard work pay off over the years, naturally making the farm their most important and valuable asset, as well as one that offers other benefits. The total family's financial security and steady income as well as your ability to be your own person - not having to answer to anybody else, and it provides you an identity and recognition in your community.

Doesn't it make sense to protect those decades of hard work from the alphabet effect, the result of spending too many years fighting the day to day battles and not enough time considering the long term implications of your success? Let's face it, when you don't plan for the long term future, you lose control of your farm's destiny in the event of death, disability, or old age.

When something bad happens there are a series of problems that seem to be automatically triggered - like dominoes that start falling each of whom knocks down the next and the next and the next. And when you are in business with your parents or your children a lack of long term planning makes the results more personally devastating and much worse than if you just lost the money involved in the collapse of your farm business.

Farm insurance agents call the domino like problems cascading one on top of the other, the alphabet effect to help you visualize how a failure to plan for the long term future will effect you and your family.

First of all, attorney's file the papers that begin the various legal proceedings. If everything has not been spelled out in advance - the courts take over with laws that were created to establish fairness in a hypothetical situation, not your situation.

Your friendly bankers will immediately begin to restrict credit. The good credit you've established over the years was only in part because of your assets. It was often in large measure based on your history of doing what you promised, pay the note on time, and since you are no longer here, the bankers have no choice but to ...

Naturally your creditors want to be paid, sooner rather than later. And since they don't want to be left holding the bag, like so often happens when the ultimate payment of the bills depended on the continued operation of the farm - they may press for payment in cash and as soon as your contract with them permits.

Debtors may begin to demand payment. People like the seed, feed, and fertilizer folks you've dealt with for decades - may not be willing to wait until harvest for their money. Because trade credit like this is typically unsecured and casually given, it may be pulled away instantly if the vendors feel threatened in any way.

Your employees start to get nervous. Your best people, those you had counted on to be there long into the future. The ones who know how everything works may start talking to your neighbors at your funeral about a new job down the road from your place. The worthless employees, the ones you would get rid of if you could - they will be there till the bitter end, along with their own special brand of meritocracy.

Family members need cash. Farm insurance agents report that most farms are supporting three groups of people within the same family. Your brother and his wife, you aunt and uncle, you and your family - you get the picture, so when something bad happens and the income stops it stops for everybody. And if you are the one people have looked to for decades as the "founder of the feast" they and all your neighbors will say that it was your responsibility to see to in that their incomes did not stop, just because something bad happened to you or yours.

There are several more letters in this alphabet of doom - each one of which will reduce the value of your business and almost any one of which your farm could handle by itself. Together, they way the dominos fall, they will combine to drastically shrink your farm's worth, threaten it continued existence, and give everyone a much different picture of how successful a business person you were - for decades to come.

Who will be hurt by your failure to take long term planning seriously? You family, your employees, and your business partners to name just a few. What are your alternatives, how can you protect your family and your farm against the many forces you can not control? How can your farm business survive this crisis?

Farm insurance agents and common sense will tell you the answer, it's taking the initiative and doing the long term planning that is your responsibility to do - for your sake and the sake of everyone that is part of your connected family farm business.

Seed Newsvine

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