A lot of farmers go to great lengths to find a good attorney to help them set up and estate plan, accept huge charges for doing so, and yet buy one of the most efficient and precious assets in your estate from Joe Blow. All the money you just spent setting up an estate plan could be ruined by owning the life insurance incorrectly in your estate, or not having the correct passages in your estate to deal with such a large, liquid asset.
In estate planning, a life insurance policy is much like unsold wheat as an asset in your estate. Until the wheat is sold, it just sits in the bin. However, upon your death, this unsold wheat has a value attached to it and it becomes a cash equivalent in your estate. Same as life insurance – just an uncashed check!
Cash equivalents are often the most overlooked and under planned assets of your estate and, as such, often can cause as much harm as good. Why? They are seldom accounted for and often can cause estate taxes.
Let’s move on to your attorney who, much like life insurance agents, knows he does not have the right training to complete your will. Attorneys can go through law school without taking estate planning as a mandatory course.
It is better your attorney had said, or indicated, he cannot do the work necessary than to have someone do it that doesn’t know what they are doing.
A will that has moving parts in it is not an easy thing to build. You have a farming child, but what happens if that child does not farm after your death? Can s/he take the land and sell it outright for a much higher amount than the non-farming children’s split of your life insurance – if the insurance ever gets to them?