Don’t worry. You don’t need a will. When you die, the laws of your state will dictate who gets your assets. The probate process is very formal, with a judge deciding who should oversee such division. No, the state doesn’t get your assets, but the state’s laws of intestacy govern which family members get your assets.
Heck, the bulk of your assets aren’t even governed by a will. Joint assets automatically belong to the surviving owner. Contract assets, such as life insurance and retirement plans, pay out to the designated beneficiaries or according to the fine print of the contract.
Your Final Wishes
Your assets will be administered after your death, but your state’s laws of intestacy probably aren’t what you’d want to happen to your assets.
For example, in Indiana, if a man dies without a will and is survived by his second wife and three kids from his first marriage, 25% of the property titled in his name will become owned by his widow. That leaves 75% of the real property to transfer to his three children.
This makes four individuals as tenants in common, who must agree on management of the land and who gets to farm it on what terms. Even in the friendliest blended family, these are not easy choices. If they don’t agree on whether to keep or sell the land, things get tricky.
That’s just the real property. The remainder of the estate (the decedent’s personal property, investments and machinery) will become owned one-half by the spouse and one-half by the kids.
An on-farm heir adds more complexity. Imagine having stepmom and two off-farm siblings owning three-fourths of the land and five-sixths of the machinery.
Assets, Appraisals, Auctions
Practically, there can be buyouts. With lots of cash assets, swapping machinery or interests in land around is no problem. But when the main assets are land and machinery, heirs tend to bicker about appraised value and struggle to reach an agreement. This can lead to partition actions and auctions.
Without a will, you haven’t designated a personal representative (executor). So, anyone can petition to be appointed.
Strike a Fair Balance
You know your family and assets. A will is your chance to nominate the right person to administer your assets.
A comprehensive estate plan will identify different assets for different beneficiaries. Any money saved by not paying a lawyer to draft a will and put a succession plan in place, will be far outweighed by the expenses associated with a family feud.
If you want the farm to remain intact for future generations, you do actually need a will.
To access resources and tools to help guide your succession planning journey, visit www.FarmJournalLegacyProject.com
