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Olsen: Tackle estate planning early

by Wyoming Livestock Roundup

Transition and estate planning are necessary for good stewardship. Farmers and ranchers can spend a lifetime building and growing an operation, but the most important part of that is developing a plan to carry on after the producer can no longer use it and direct it, an attorney and estate planner tells producers.

Pam Olsen, who is also a rancher in Harrisburg, Neb., encourages producers to make good stewardship decisions by carefully developing a transition plan. 

“Transition means how we will pass on our assets when we can no longer use them,” she tells producers. “The question we should ask ourselves during our lifetime is what our goals are as an owner, and where it’s reasonable.” 

Having a plan

“Find out what the goals are of those who operate with us and who are not owners,” she adds.

“We don’t owe our kids an inheritance, but we do owe them a plan,” Olsen continues. 

That plan should include a way of transitioning assets to the next generation who may or may not be related. 

Estate planning is a way for ranchers to spell out how they want their assets distributed, with consideration of the surviving spouse and on- and off-farm heirs. 

It can also minimize federal and state estate taxes and save on settlement costs. 

Tough questions

A well-planned-out estate plan tackles the hard questions, Olsen states. 

“The simple answer is not always the right answer. The right answer is not always easy or popular,” she continues. 

Producers need to address whether their surviving spouse is capable of taking over the management of the operation if the spouse who passed away is not there to help. 

“What is their skill-set, interest level and capability?” she asks. “Is there someone else who meets the needs of the surviving spouse, like a trusted employee?”

Later on

Producers should consider how they feel about their spouse remarrying after their death. 

“Consider what could happen to the assets from the first marriage after we pass away, if our spouse marries someone with health, kid or credit issues. Is there some way to protect what we have built in that first marriage?” she asks. 

There are ways to build those protections into an estate plan, Olsen says, but producers should talk about what those protections might be and how they would work. 

“Producers should also talk about what happens to their assets when they’re both gone,” she notes.

Transferring skills

Olsen shares a story of one rancher whose elderly neighbor passed away, and the man’s son, who was in his 50s, came to the rancher for help. He wanted to know when he should wean his cattle, what shots to give and how to make management decisions. 

He had spent most of his life as a glorified hired hand. His father had never let him make any decisions or taught him about ranch management.

The rancher told Olsen that situation convinced him to develop an estate plan. 

“I vowed then and there no son of mine would have to go to a neighbor to ask questions like that when I was gone,” he told her.

It is a situation Olsen has seen too often as an estate planner. 

Children who are heirs to the estate spend much of their adult life as glorified hired hands, receiving no real management responsibility until after their parents are gone. Because of this, they may not have the skill-set needed to handle day-to-day management decisions. 

Olsen says by developing a transition plan with a timeline, producers can transition control, decision-making and management decisions to their heirs without losing total control of the operation while they are still alive.

She reminds producers that heirs may not necessarily be the oldest child or any of the children. They can also be different people. 

“These decisions should be made based on skill-set,” she says. 

Know the entity

Farmers and ranchers who have entered into entity agreements need to know what they say, Olsen says. 

“If we have an entity and we have an agreement related to that entity, we need to know how assets are owned. Ownership may dictate where assets are going to go even if we haven’t intentionally planned for that,” she explains. 

Other agreements like joint tenancy, life insurance policies, payable on death certificates and bank accounts will go to the beneficiary listed, no matter what the estate plan says. 

“These designations are in place and decide where those assets will go regardless of what the estate plan says. That is why it is important to know what our assets are, what we own and how we own it,” she adds.

Important documents

An estate plan will typically have some version of these documents in play. 

“Ranchers need to have a will and maybe a trust. They should also have a power of attorney, so if they can’t make medical or financial decisions, someone trusted can make them for the rancher,” Olsen states.

“The easiest way to determine who a power of attorney should be is by picturing yourself lying in a hospital bed. Your eyes are open, but you can’t speak. Who do you see at the end of the bed holding your checkbook, and does that person make your heart monitor speed up or stay steady?” she asks.  

Creative options

Olsen tells ranchers to look at estate planning as an opportunity to be creative. 

“It is important to speak with our estate planner honestly and candidly. Planning is only as good as the conversation that backs it up,” Olsen explains. “Ranchers should get help and make a plan that they want.” 

She states, “If we don’t do something intentional, the state has a plan for us and will decide what happens to the estate. Either we think about this stuff and make a plan, or the state will do it for us.”

Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to

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