January... A new beginning. A time to set goals. And for our farmers, it can sometimes mean a slightly less hectic schedule!
As we start January, we want to start conversations with all of our clients about life insurance, estate planning and wealth transfer to help them achieve their goals. We often find this is the best time to get our farming clients to sit down and discuss their life insurance needs.
Life insurance at its core is a simple way to help plan for our final expenses. However, once we start explaining life insurance to clients, our clients often realize that there are so many things we can do with life insurance beyond paying for final expenses.
Many of our farming families must think about their farm perpetuation plan. These farms have been in families for multiple generations and the goal of every family is to keep the farm in the family if there is a new generation that is interested. But many parents are faced with the question of "how do we keep things 'equal' between our multiple children?" Life insurance can be used as a tool to support a buy-sell agreement between generations. A policy is purchased with a large enough death benefit to "purchase" the farm from any uninterested children at the time of a parent's passing. The child interested in the farm gets the deed to the farm and the other children who are no longer involved in the farm will get an equal share of money to purchase their share of the farm. The plan is laid out well in advance to being needed and provides clarity for all parties involved.
Covering Operating Expenses
Other farmers worry about what would happen to the farm if the unthinkable happened and they were not around to take care of the farm. A life insurance policy can be purchased so that if the unthinkable happened, the farm would have extra operating funds to allow family members time to grieve, hired hands to be paid, loss of income to be covered.
Tax-Free Wealth Transfer
Finally, as a farm becomes well established, many of our farmers are looking at ways to transfer wealth to the next generation. Life insurance is one tool that our clients can use to transfer wealth to the next generation tax-free. Life insurance in conjunction with a well written will can help earmark funds to help plan for future college educations, home purchases, etc.
We know that there is never a quiet day for a farmer. However, if you find yourself with a little bit of extra time on a snowy January day, give our office a call. We would love to talk about how life insurance can help you achieve your goals!